Orange Ltd., a publicly traded company, has compiled their comparative Statement of Financial Position as follows for their December 31, 20X8 year-end. Orange Ltd Comparative Statement of Financial Position As at December 31, 20X8 20X8 20X7 Assets Current Assets Cash 42,485 22,000 Accounts receivable 163,794 181,000 Inventory 23,000 229,297 53,000 256,000 Non-current assets PP&E (net) 759,600 446,000 Patents 80.000 839,600 87.000 295,000 Total Assets 1,068,897 507.000 Liabilities and Equity Current liabilities Accounts payable 47,532 31,700 Income tax payable 86,000 133,532 73.200 104,900 Non-current liabilities Bank loan 698,000 275,000 Total liabilities 831,532 379.900 Equity Common shares 78,000 78,000 Retained earnings 159.365 237.365 49.100 270,000 Total equity Total Liabilities and Equity 1,068,897 507,000 Additional information: Net income in 20x8 was $146,400: Sales were 1,552,000; Cost of sales 852,000; Operating expenses of 310,000; interest expense of 14,000; and income tax expense of 238,000. PP&E is presented net of accumulated depreciation of $45,000 in 20x8 and $37,000 in 20x7. There have been no disposals of PPE during the year. Patents are presented net of accumulated amortization of $29,000 in 20x8 and $22,000 in 20x7. There have been no disposals of intangible assets during the year. Required: (a) Prepare the operating section of Orange's Statement of Cash Flows for 20X8 using the direct method. (8 marks) (b) Write a 4-5 sentence memo to the shareholders of Orange Ltd discussing changes in the company's liquidity, solvency, and leverage year-over-year