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Question 1. The following is data in dollars from financial statements of an international company called "Suits for every size" which was established in 2010 and whose main activity is the sale of suits to the whole world: Suits All Sizes Suits All Sizes Competing Company 2018 2019 2019 Name 127,800,000 47,963,000 27,253,000 Total balance 76,372,000 5,844,000 3,844,000 Current Assets 51,428,000 42,119,000 23,409,000 Non-current assets 12,220,000 13,410,000 15,610,000 Equity 90,810,000 8,501,000 7,411,000 Current liabilities 24,770,000 26,052,000 4,232,000 Non-current liabilities gain and loss 13,210,000 11,878,000 9,178,000 Total Revenue 8,651,000 7,221,000 6,883,000 Total cost of sales 4,559,000 4,657,000 2,295,000 Gross profit 4,359,000 4,232,000 1,735,000 Operating Profit 3,221,000 1,961,000 1,201,000 Profit after management and general 2,920,000 (510,000) 520,000 Profit (loss) after financing expenses 2,820,000 1,190,000 520,000 Profit after other income / expenses 2,820,000 1,190,000 520,000 Pure profit Additional data: 1. The company learned on December 31, 2019 that its large customer abroad who owed it $ 500,000 went into cash flow difficulties and asked to defer payment for an unknown date During 2019, the company sold a building that it owned and therefore generated a capital gain of $ 1,700,000. 3. The Company stated in its notes to its reports that the issue of depreciation of the Company's machines (valued at NIS 30 million in the books) is a "critical accounting estimate" and that the Company is not required to reduce in light of the use of a discount rate of 6%. The discount rate used by the competing company to examine impairment of similar assets is 8%. 4. There are covenants (financial criteria) due to the Company's liabilities to banks in the amount of NIS 30 million, according to which if the equity is less than 26% of the total balance sheet, the banks have the right to repay the debt immediately. Required: Based on your data, analyze the changes that took place in the various items in the company's reports between 2018 and 2019, using financial ratios and comparisons with a competing company. On the basis of the aforesaid, he formulated a position regarding the "financial situation" of the company. 2. In your opinion, according to the distribution tests, can the company distribute a dividend at the beginning of 2020? If so, how much? For the purposes of this section, make as many discounts as you see fit. Please indicate what the discounts are. Question 2. Background: Through voting agreements, the company held approximately 51% of the shares of an investee company and consolidated its financial statements. The investee company made an offering to a third party, so that the company's holdings in it decreased to approximately 49%. Although the company no longer holds most of the voting rights and the right to appoint directors, this contention is that as a result of the other shareholders in the investee company (no one holds more than 5%), it remains effectively in control of the investee allowing it to appoint a majority of board members. Issue: Should the Company continue to consolidate the statements of the investee company? Decision: Examining the set of facts, it appears that the ability to direct the operations of the investee company and the ability to determine its financial and operational policy is actually in the hands of the company - both before and after the issuance of the shares to a third party (through effective control). Accordingly, the Company must continue to consolidate the investee Company in its financial statements. Explain your opinion on this reasoning, its disadvantages, and advantages.