Background Lucky Australia Pty Ltd has been a customer of Bank of Australia since 2001. The industrial operations of this designer furniture manufacturing company are based in Fyshwick Industrial Area, Canberra. Mark and Julie Cotter own Lucky. The structure is a standard two-dollar company, with the Cotters owning one share each. Mark is a qualified carpenter and Julie handles administration and sales. Both are aged in their early 50s. When they started the company in 2001, they made standard furniture for the household market. They initially faced hardship as the brand was not known. But over the years, the brand got well established and with the advent of e-business, they have expanded multi-fold supplying designer furniture throughout Australia. The business currently employees 15 staff. They have two sons. Simon helps in business and contributed equity equal to that of his father and father's wife while Peter (son of Mark and Julie) is studying at the university. The business produces a range of designer furniture that include, dining table, chairs, sofa, ensemble, and study desk. Given their reputation in the market place, they are considering expanding in the office furniture line. The financial statements of Lucky Australia Pty Ltd were as below: Income statement for the year ending Lucky Australia Pty Ltd AS '000 2016 2017 Cash sales Credit sales Less Cost of goods sold 15000 135000 1600 171000 150000 118000 32000 135000 149000 38000 Gross Profit Less: Expenses Warehousing Transport Administration Selling Interest on private loan 6500 3000 9500 5500 0 7000 5000 9500 7000 1000 24500 7500 29500 8500 Net Profit Balance Sheet as at the end of 2016 2017 15000 20000 Non-current assets Trade debtors Cash at bank Inventory 25000 5000 30000 41000 3500 47000 60000 25000 25000 91500 38000 38000 50350 Total current assets (TCA) Trade creditors Total current liabilities (TCL) Working Capital TCA-TCL Total assets Long-term private loan Share capital Reserves and Surplus Liabilities + Equity 35000 50000 0 37500 12500 50000 73500 15000 37500 21000 73500