Income Statement for the year ended 31 March 2016 Notes Nixon Ltd 000 638 (331) Zip Ltd E000 493 (297) Revenue Cast of sales Grass profit Distribution costs Administrative expenses 307 (36) 199) 196 (29) (46) 1 Total equity and liabilities 295 212 Profit before taxation Taxation 172 (21) 121 (22) Notes to the financial statements: 1 The non-current assets held by the companies are as follows: Profit for the year 99 151 ====== BEBE Land and buildings Fixtures and fittings Motor vehicles Nixon Ltd E000 97 28 73 Zip Ltd 000 43 17 51 Zip Ltd 000 000 198 111 000 000 Statement of financial position as at 31 March 2016 Noted Nixon Ltd E000 000 Non-current assets (NBV): Property, plant and equipment 1 Current assets: Inventory Trade and other receivables 35 Cash and cash equivalents 2 198 111 97 101 Total assets 2. Trade and other payables for both companies include a proposed Jend. Nixon Ltd has proposed a dividend of 50,000 and Zip Ltd a dividend of 40,000 3. You have been asked by a client to advice on the financial position of two companies in a Similar trade sector. You have been supplied with the following financial statements. question Define working capital cycle and calculate the working capital cycle of both companies and discuss how a company can improve the working capital cycle? (30 marks) 295 212 Equity and liabilities: Share capital (E1 share each) Retained earnings 50 161 30 66 211 96 20 Non-current liabilities: Borrowings Current liabilities: Trade and other payables Current tax payable Bank overdraft 2 74 10 74 12 10 84 96 116