Please do the Required part. Thank you

"Frankly, if we continue to grow, we will be out of business soon.

This was the glum assessment of Kathy Lin, President and CEO of Dawn Limited, a company that designs, manufactures, and retails women's fashion. Kathy has a $30-$year history in

the fashion business and has managed her own label for much of that time. In $20$X$0,$ she

incorporated Purple, and the company grew rapidly. It was particularly known for its edgy fashion

design, reasonable prices, and quick turnaround. Dawn hires young designers and has established

a highly efficient manufacturing and distribution system to place trendy clothes in stores ahead of

her competition. Initially, designs had been sold only in Dawn's own stores, but over the last two

years, Dawn began selling to larger chains. As a result, the scope of Dawn has significantly

increased as have revenues and profits. In fact, the company reported a loss of $$1,345$ in $20x0$ but

moved to earnings of $$133$ in $20x1,$ earnings of $$2,580$ in $20x2,$ and an impressive $$6,245$ in

$20$X$3($all figures in thousands$).$ Sales had more than tripled over the past three years. Capital

assets purchased over this period were $$16,000$ in $20x2,$$$9,500$ in $20x2,$ and $$8,000$ in $20x3.$

$"$We are pretty much out of cash, and I have bills to suppliers that are due. My banker will

provide some cash, but not enough to keep up with this$-$and all that borrowing is getting expensive.

I$\text{'}$m not sure how we can post such high earnings and be so broke. Can you explain this to me and

help me with a plan to get out of this mess? I need good advice, fast."

Required: You are an accounting professional in public practice and have provided business

advice to Kathy in the past. You agree to meet with her on this issue tomorrow and now are

preparing a draft report for discussion. You decide that calculating cash flows from operating

activities is a good place to start $($Exhibit $1).$ In addition to providing an analysis of cash flows

from operating activities of Dawn Ltd$,$ you are also expected to provide advice on cash flow

management to Kathy Lin.