Shown below are the summarised final accounts of Mar tel plc for the last two financial years:

Cash flow statements • 659 Balance sheet as at 31 December 20X1 20X0

£000 £000 £000 £000 Non-cur rent assets Tangible Land and buildings 1,464 1,098 Plant and machiner y ,520 ,194 Motor vehicles ,140 , 62 2,124 1,354 Cur rent assets Inventor y ,504 ,330 Trade receivables ,264 ,132 Government securities , 40 —

Bank — , 22

,808 ,484 Cur rent liabilities Trade payables ,266 ,220 Taxation ,120 , 50 Proposed dividend , 72 , 40 Bank overdraft ,184 —

,642 ,310 Net current assets ,166 ,174 Total assets less current liabilities 2,290 1,528 Non-cur rent liabilities 9% debentures (432) (350)

1,858 1,178 Capital and reser ves Ordinar y shares of 50p each fully paid ,900 ,800 Share premium account ,120 , 70 Revaluation reser ve ,360 —
General reser ve ,100 , 50 Retained ear nings ,378 ,258 ,958 ,378 1,858 1,178 Land and Motor buildings Plant, etc. vehicles £000 £000 £000 Cost at 1 January 20X1 3,309 470 231 Revaluation ,360 — —
Additions , 81 470 163 Disposals — (60) —
Cost at 31 December 20X1 3,750 880 394 Depreciation at 1 January 20X1 2,211 276 169 Disposals — (48) —
Added for year , 75 132 85 Depreciation at 31 December 20X1 2,286 360 254 Summarised income statement for the year ending 31 December 20X1 20X0 £000 £000 Operating profit 479 215 Interest paid 52 30 Profit before taxation 427 185 Tax 149 65 Profit after taxation 278 120 Additional information:
1 The movement in non-current assets during the year ended 31 December 20X1 was as follows:
The plant and machiner y disposed of during the year was sold for £20,000.
2 During 20X1, a rights issue was made of one new ordinar y share for ever y eight held at a price of £1.50.
3 A dividend of £36,000 (20X0 £30,000) was paid in 20X1. A dividend of £72,000 (20X0 £40,000)
was proposed for 20X1. A transfer of £50,000 was made to the general reser ve.
Required:

(a) Prepare a cash flow statement for the year ended 31 December 20X1, in accordance with IAS 7.

(b) Prepare a report on the liquidity position of Martel plc for a shareholder who is concerned about the lack of liquid resources in the company.