4QQMN501 Question 3 The following are the summarised financial statements of Kingsla Motors UK Subsidiary Ltd for the year 31st of December 2020. Profit before taxation (after interest) 25,000,000 Depreciation (before tax) 3,000,000 Interest receivable 45,000 Interests payable 150,000 At the beginning of the year: Inventories 12,000,000 Trade receivables 24,000,000 Trade payables 5,000,000 Prepayments 500,000 Accrued expenses 200,000 At the end of the year: Inventories 20,000,000 Trade receivables 30,000,000 Trade payables 7,000,000 Prepayments. 300,000 Accrued expenses 400,000 The following further payments made within the last financial year: Tax Paid 4,000,000 Interest Paid 700,000 Dividends Paid 5,000,000 a) Critically discuss what insights can be drawn from a statement of cash flows and why this offers important insights beyond what is included in the income statement or balance sheet. (10 marks) b) Based upon just the items included in the operating section of the statement of cash flows, discuss how Kingsla Motors UK Subsidiary Ltd might alter its working capital to increase its cash and cash equivalents. (10 marks) c) Calculate both the cash generated from operations and net cash from operations for Kingsla Motors UK Subsidiary Ltd. (10 marks) Total marks for Question 3 (30 marks) See Next Page