Requirement 2: Income statement analysis a. Which method, single-step or multiple-step, is used in the statement? b. What are the captions of the intermediate profit amounts reported by this company? c. Calculate the gross profit ratio for each of the year reported. Briefly evaluate the trend of these results. d. Is operating income increasing or decreasing for the year reported? e. Does the company report any unusual or infrequently occurring items? If so, what are the effects of these items on net income and earnings per share? Requirement 3: statement of cash flows analysis a. Which method, direct or indirect, is used in the statement? b. List the principal sources and uses of cash for this firm. c. Evaluate the change in cash. Has the firm generated most of its cash requirements from operations, or has it borrowed extensively? Has the firms uses of cash been balanced between investments and dividends? d. Have there been significant treasury stock transactions? e. Has the cash balance been increasing or decreasing? What seem to be the implications of this pattern for dividends?