The following information relates to Brian Limited for the year ended 30 June 2006:

Additional information:
1 The company purchased some new vehicles during the year for £75 000.
2 During the year the company sold a vehicle for £12 000 in cash. The vehicle had originally cost £25 000, and £10 000 had been set aside for depreciation.
Required:

(a) Prepare a cash flow statement for Brian Limited for the year ended 30 June 2006.

(b) Outline what it tells the managers of Brian Limited.

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Profit and loss account for the year to 30 June 2006 Gross profit Administrative expenses Loss on sale of vehicle Increase in provision for doubtful debts Depreciation on vehicles 63-31 000 000 230 76 35 115 Net profit 115 Taxation 65 50 Dividends 25 25 Retained profit for the year Balance sheet at 30 June 2006 2005 Fixed assets Vehicle at cost Less: Depreciation 000 2006 000 000 000 150 75 75 200 100 100 Current assets Stocks 60 50 Trade debtors 80 100 Less: Provision for bad and doubtful debts 4 76 5 95 Cash 6 8 142 153 Current liabilities Trade creditors Taxation Proposed dividend Capital and reserves Ordinary share capital Profit and loss account (53) (52) (65) (20) (132) g* (25) (143) 110 75 35 110