1)Please answer with workings.. Tqvm

Question 1 Woolpit Co is a manufacturing company based in the West Country of the UK. Summarised accounts for the last two years are presented below: Statements of financial position as at 30 June 2014 '000 '000 820 2015 '000 '000 1,000 Non-current assets Current assets Inventory Receivables Cash 710 990 Total assets 1,530 1,990 Equity & liabilities Ordinary shares (25p) Retained earnings 930 200 Total equity Non-current liabilities Current liabilities Overdraft Trade payables Other payables Total current liabilities 480 860 1,530 1,990 Income statements for the years ending 30 June 2014 '000 1,800 2015 '000 2,900 260 160 40 Revenue Gross profit Profit before tax Income tax expense 210 120 30 Profit for the period Dividends 120 40 Retained profit for the period Inflation during the last year was 5%. Required: (a) illustrating your answer using the above financial data, fully explain what is meant by overtrading, what are the implications and discuss how it might be recognised in a company. (10 marks) (b) One of Woolpit's managers has suggested that the company would be more efficient if it reduced its operating cycle to the minimum possible period of time. (i) Explain what is meant by the operating cycle of a company, explain the significance and calculate it for 2015 (8 marks) (ii) Discuss how a company could try to reduce the operating cycle and whether it should always be reduced to the minimum possible period. (7 marks) (Total 25 marks)