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Financial information related to Claudia Sales for the year to 30 April 2019 were...

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Accounting

Financial information related to Claudia

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Sales for the year to 30 April 2019 were 89m, yielding a gross profit of 8.7m and a profit before tax (after finance costs) of 8.2m. At the beginning of the year to 30 April 2020, the company bought new manufacturing equipment and recruited six more sales staff. Sales for the year to 30 April 2020 were 131m, with an operating profit of 8.5m, and a profit before tax of 7m.

Task

a. Suggest ways in which Claudia might seek to resolve its current funding problems, and avoid the risks associated with overtrading.

As on 30 April 2020 As on 30 April 2019 m m 40.8 36.4 Non-current assets Current assets Inventory Receivables Cash 22.0 21.0 0.0 43.0 83.8 9.5 10.8 0.2 20.5 56.9 Total assets Capital and reserves Issued share capital Reserves Equity shareholder's funds Current liabilities Bank overdraft Trade payables 11.8 38.4 50.2 11.8 32.7 44.5 13.1 20.5 33.6 83.8 4.2 8.2 12.4 56.9 Total equity and liabilities

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