2017: Question 1

1.1 Explain why depreciation was included in computing the cash flow from operating activities. (2 marks) 1.2 Calculate the cash balance on 31 December 2015 if there was a bank overdraft of R35 000 on 31 December 2016. (3 marks) 1.3 Based on your study and analysis of the cash flow statement of Rajkot Ltd, discuss in detail how the company appears to be performing. (8 marks) 1.4 The long term loan was increased on 01 July 2016. Explain whether it was prudent for the company to have taken the loan. (3 marks) 1.5 Suggest four ways in which the company can improve its liquidity. (4 marks)