Hello, I need help with Question 2. Please help.

Situation 3 Philip Spencer, the owner of Wholesome Foods, has hired you to evaluate his firm's financial performance. The firm's financial data is provided below, along with an average for the financial ratios that Spencer collected on several competing peer firms. Question 1 Compute the financial ratios discussed in the chap- ter for Wholesome Foods for 2012 and 2013. Question 2 Prepare a cash flow statement for the firm for 2012 and 2013. Question 3 Interpret your findings, both for the firm's financial ratios compared to those of the peer group and for the cash flow statementned with CamScanner2011 Assets 2012 2013 $ 21,000 Cash 25,000 Accounts receivable $ 20,200 42.000 13,000 46,000 Inventory 51,000 84,000 36,000 Prepaid rent 1,200 1.100 2,060 Total current assets $ 115,200 Gross property, plant, and equipment $ 138,300 $ 169,090 650,000 Accumulated depreciation 664,000 740,060 (364,000) Net property, plant, and equipment (394,000) (434.000) $ 286,000 $ 270,000 $ 306,000 TOTAL ASSETS $ 401,200 $ 401,300 $ 475,000 Debt (Liabilities) and Equity 2011 2012 2013 Accounts payable $ 48,000 $ 57,000 $ 52,400 Accrued expenses 9,500 9,000 12,000 Short-term notes 11,500 9,000 20,000 Total current liabilities 69,000 $ 75,000 $ 84,400 Long-term debt 160,000 150,000 185,000 Common stock $ 22,200 $ 22,200 $ 34,500 Retained earnings 150,000 161,100 171,100 Total owners'equity $ 172,200 $ 183,300 $ 205,600 TOTAL DEBT AND EQUITY $ 401,200 $ 401,300 $ 475,000 Income Statement 2012 2013 Sales $ 600,000 $ 650,000 Cost of goods sold (460,000) (487,500) Gross profits $ 140,000 $ 162,500 Operating expenses: General and administrative expenses $ 30,000 $ 37,500 Depreciation expense 30,000 40,000 Total operating expenses $ 60,000 $ 77,500 Operating profits $ 80,000 $ 85,000 Interest expense (10,000) (12,000) Profits before taxes $ 70,000 $ 73,000 Taxes (27,100) (30,000) Net profits $ 42,900 $ 43,000 Net profits $ 42,900 $ 43,000 Dividends paid (31,800) (33,000) Addition to retained earnings $ 1 10,000 Financial Ratios (Averages) Peer Companies Current ratio 1.80 Return on assets 16.8% Operating profit margin 14.0% Total asset turnover 1.20 Debt ratio 0.50 Relmget anned with CamScanner