The following information is based on the 2008 annual report of Opus One, Inc. (a real company whose name has been disguised). Opus One operates in a single business segment, the retailing and servicing of home audio, car audio, and video equipment. Its operations are conducted in Texas through 20 stores and two service centers. The information provided in the annual report has been combined and abbreviated.

Additional Information Regarding Year Ended June 30, 2008:
• The company did not declare or pay any cash or stock dividends during the year.
• The company reported a \($7,377\) loss from scrapping equipment with a book value of the same amount.
• The depreciation expense for the year was $2,265,735.
• The following breakdown is provided for the long-term debt:

On February 26, 2008, the company obtained a \($3,600,000\) term loan from a bank due February 28, 2012.
Required:
1. Prepare a statement of cash flows for the year ended June 30, 2008 using the indirect approach.
2. On the basis of the cash flow statement, analyze Opus One’s financial performance during the fiscal year 2008.

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($ in thousands) Long-Term Debt June 30 2008 2007 Term loan $3,420,000 Mortgage note $ -0- 534,475 Total 3,954,475 555,455 555,455 Less: Current installments: (681,716) (21,348) Long-term debt-current installments $3,272,759 $534,107