Grillo Plc is a furniture retailer. The firm offers an industry standard 45 days credit. The following information has been extracted from the annual accounts of Grillo Plc. Income Statement for the year ending 31st December 2021 2021 2020 '000 '000 Turnover (all credit sales) 92,000 89,100 Less: Cost of sales (43,200) (40,100) Gross Profit 48,800 49,000 Other Expenses (33,600) (37,900) Profit before taxation 15,200 11,100 Statement of Financial Position as at 31st December 2021 2021 2020 '000 '000 Non-Current Assets 66,500 68,200 Property, plant & equipment Current Assets Stock 17,300 17,900 Trade Debtors 20,200 18,100 Cash 500 1,000 38,000 37,000 Total Assets 104.500 105.200 Equity & Liabilities Equity & Reserves Issued Share Capital 30,500 30,500 Retained Earnings 43,300 34,600 73,800 65,100 Non-Current liabilities 20,100 25,600 Current liabilities Trade and other payables 10,600 14,500 Total equity & liabilities 104.500 105,200 Required a. Calculate and comment on the Cash Operating cycle for each of the two years to 31st December 2020 and 2021, respectively. In your answer, refer to the drivers of the Cash Operating cycle. (28 marks) b. Calculate and comment on both the Gearing and Debt Ratios for each of the two years to 31st December 2020 and 2021, respectively. In your answer refer to the drivers of these ratios. (32 marks) c. Discuss why both a business and a government may issue Bonds or Debentures as a form of finance. (20 marks) d. Evaluate the impact Working Capital Management difficulties may have on firms and the wider economy. (20 marks) Total: 100 Marks Grillo Plc is a furniture retailer. The firm offers an industry standard 45 days credit. The following information has been extracted from the annual accounts of Grillo Plc. Income Statement for the year ending 31st December 2021 2021 2020 '000 '000 Turnover (all credit sales) 92,000 89,100 Less: Cost of sales (43,200) (40,100) Gross Profit 48,800 49,000 Other Expenses (33,600) (37,900) Profit before taxation 15,200 11,100 Statement of Financial Position as at 31st December 2021 2021 2020 '000 '000 Non-Current Assets 66,500 68,200 Property, plant & equipment Current Assets Stock 17,300 17,900 Trade Debtors 20,200 18,100 Cash 500 1,000 38,000 37,000 Total Assets 104.500 105.200 Equity & Liabilities Equity & Reserves Issued Share Capital 30,500 30,500 Retained Earnings 43,300 34,600 73,800 65,100 Non-Current liabilities 20,100 25,600 Current liabilities Trade and other payables 10,600 14,500 Total equity & liabilities 104.500 105,200 Required a. Calculate and comment on the Cash Operating cycle for each of the two years to 31st December 2020 and 2021, respectively. In your answer, refer to the drivers of the Cash Operating cycle. (28 marks) b. Calculate and comment on both the Gearing and Debt Ratios for each of the two years to 31st December 2020 and 2021, respectively. In your answer refer to the drivers of these ratios. (32 marks) c. Discuss why both a business and a government may issue Bonds or Debentures as a form of finance. (20 marks) d. Evaluate the impact Working Capital Management difficulties may have on firms and the wider economy. (20 marks) Total: 100 Marks