Conday and Co. Ltd has been in operation for three years and produces antique reproduction furniture for
Question:
Conday and Co. Ltd has been in operation for three years and produces antique reproduction furniture for the export market. The most recent set of financial statements for the business is set out as follows:
Notes 1 The debentures are secured on the freehold land and buildings.
2 Selling and distribution expenses include £170,000 in respect of bad debts.
The directors have invited an investor to take up a new issue of ordinary shares in the business at £6.40 each making a total investment of £200,000. The directors wish to use the funds to finance a programme of further expansion.
Required:
(a) Analyse the financial position and performance of the business and comment on any features that you consider to be significant.
(b) State, with reasons, whether or not the investor should invest in the business on the terms outlined.
Step by Step Answer:
Financial Accounting For Decision Makers
ISBN: 9780273688471
4th Edition
Authors: Eddie McLaney, Peter Atrill