(20 marks) Question 3: Your company is in the process of evaluating a target company for an acquisition All the evaluation tasks have been allocated and your task is to evaluate the working capital of the target company You reviewed the last audited financial statement of the target company and gathered the following data Compounded Feb 2014 Feb 2015 Feb 2016 Feb 2017 Growth % Sales (R) 1 287 300 1 416 030 1 543 473 1 713 255 100 Cost of sales (R) 579 285 736 336 848 910 1 027 953 21 1 Inventory days 30 38 42 43 Trade receivables days 37 45 47 53 Trade Payables days 45 42 35 37 Current Ratio 25 30 36 35 Acid test ratio 18 21 24 24 Inventory (R) 47 612 76 660 97 683 121 101 36 5 Trade receivables (R) 130 493 174 579 198 749 248 774 24 0 Trade Payables (R) 71 419 84 729 81 402 104 203 134 Cash Conversion Cycle days 22 41 54 59 38 9 1 Required: Evaluate the working capital based on the above-mentioned data (Hint, brefly interpret the key indicators with possible reasons and draw a conclusion on the state of the target company's working capital) (15) 2 What will the effect be on the "Cash generated by operating activities in the cash flow statement? (2) 3 Explain the term "overtrading e