QUESTION 3 (15 Marks: 27 minutes) Handyman Limited is a hardware wholesaler supplying goods to do-it yourself retailers around the country. The company commenced operations at the beginning of the 20x3 year. The company has been operating successfully for a number of years. Although turnover increased consistently, the Company has recently been experiencing cash flow problems. The managing director has approached you for advice on how to improve this situation. The following amounts were extracted from the records of the company: 20x3 20x4 20x5 C000s C000s C000s Turnover 100 000 120 000 135 000 Cost of sales 75 000 90 000 101 250 Profit before interest and tax 6 000 5 500 5 600 Accounts receivable 16 500 25 000 29 600 Account payable 13 000 14 700 17 000 Inventory 18 750 26 000 30 400 Bank/ (overdraft) 5 000 (500) (2 000) Required: 1. Identify and calculate the ratios that are needed to analyse the companys working capital for the periods 20x4 and 20x5. (10 marks) 2. Comment on the companys working capital management in the light of these ratios.