The following summarised accounts have been prepared for Pill Limited:

Additional information:
(a) There were no sales of non-current assets during the year ended 31 May 2020.
(b) The loans were paid back at the beginning of the year.

Required:
(a) Compile Pill Limited’s statement of cash flows for the year ended 31 May 2020.
(b) What does it tell the managers of Pill Limited?

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Pill Limited Statement of profit or loss for the year ended 31 May 2020 Sales Less: Cost of goods sold Gross profit Less: Expenses: Administrative expenses Depreciation: vehicles furniture 2019 £000 2400 (1600) 800 (310) (55) (35) 400 2020 £000 3000 (2000) 1000 (320) (60) (40) 420