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2. Clean Places (CP) is a cleaning company that cleans offices for other businesses. It has been steadily expanding the number of customers but is

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2. Clean Places (CP) is a cleaning company that cleans offices for other businesses. It has been steadily expanding the number of customers but is worried that many of the new companies do not pay their invoices on time. Look at the summary of their balance sheet below to assess if they have a problem with their liquidity. Non-Current Assets Current Assets (including Inventories) Inventory Current Liabilities Non - Current Liabilities $000 1000 200 50 200 300 a. What is meant by 'non-current assets? [2] b. Identify two likely current liabilities of Clean Places. [2] c. Identify and explain two possible reasons why the current assets might have increased this year for Clean Places. [4] Reason 01: Reason 02: d. Identify and explain two limitations of using these accounts to compare Clean Places' financial position with previous years. [6] Limitation 01: Explanation: Limitation 02: Explanation: e. Do you think the owners of Clean Places should be worried about the liquidity of the business? Justify your answer using the financial information above. [6]

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