2 Consider the following income statement for the year ended on 31/12/2021 (all data expressed in ): sales revenue 154,300 cost of sales -73,600 gross profit 80,700 wages -23,560 administrative expenses -9,560 rent expenses -12,000 change in warranties provision -2,000 depreciation -20,000 operating profits 13,580 interest expenses -1,260 pre-tax profits 12,320 taxes (20%) -2,464 profits for the year 9,856 And the following balance sheets for the same company: 31/12/2021 31/12/2020 PPE at cost PPE current assets: inventories 160,000 130,000 accumulated depreciation 95,000 75,000 65,000 55,000 5,670 12,340 receivables 34,500 23,670 prepaid rent 4,000 0 cash 15,746 24,050 current liabilities: warranties provision 5,500 3,500 payables 42,000 45,600 non-current liabilities: bank loan 5,000 2,400 10% bond 10,000 10,000 equity: share capital 30,000 30,000 retained profits 32,416 23,560 During 2021, the company paid dividends for 1,000 to shareholders. Taxes are paid in full on the last day of December. a) Prepare the cash flows statement for the year ended on 31/12/2021. What have been the main uses and sources of cash for the company during the year? [25 marks] b) Comment on the solvency and liquidity of the company using the ratios that you consider most appropriate. How have solvency and liquidity evolved in 2021? [10 marks]