Additional Information:

$1.$The change in PP&E represent cash expenditures for a new factory

$2.$There were no disposals of PP&E during the year

$3.$There were no dividends declared during the year

$4.$The common stock was issued for cash

$5.$A review of the income statement noted a gross profit margin of

$20\%$ and Research & Development costs of $$0\mathrm{.}7$ for the year

Required:

$1.$Prepare a statement of cash flows using the indirect method

$5.$No dividends were declared. Why?

$6.$Why might the company be losing so much money? Do you agree with their strategy?

$7.$What are the risks to the company going forward?