(c) State what steps might be taken to improve the operating cash cycle.
 

Sedap Rasa Berhad which is in the fine dining business has become increasingly concerned over its liquidity position in recent months due to the negative impact from Covid-19 pandemic. The most recent set of financial statements for the business are as follows: Statement of Profit and Loss for the period ended 31 December 2020 RM RM Sales 550,000 Less: Cost of sales Opening stock 170,000 Purchases 465,000 635,000 Closing stock (165,000) (470,000) Gross profit 80,000 Expenses (90,000) Net loss (10,000) 5 Statement of Financial Position as at 31 December 2020 Cost Cumulative Net Book Value Depreciation RM RM RM Non-Current Assets Premises 310,000 610,000 85,000 (300,000) (40,000) (35.000) (375.000) Fixtures and fittings 45,000 70.000 425.000 Motor vehicles 105.000 800.000 Current Assets Stocks 165,000 Debtors 183.000 348.000 773.000 Total Assets Financed by: Capital 120,000 Retained profit 160.000 280,000 Non-Current liabilities Loans 173,000 Current liabilities Creditors 146,000 Bank overdraft 320.000 773.000 174.000