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QUESTION 5 (15 MARKS) The following information concerns the business of Crunchy Crust Limited over the two- year period 2019 to 2020. Extract from
QUESTION 5 (15 MARKS) The following information concerns the business of Crunchy Crust Limited over the two- year period 2019 to 2020. Extract from Statement of Cashflows for the year ended 31 December 2019 2020 Net cash flow from operating activities. $ (20,000) $ 37,000 Net cash flow from investing activities Net cash flow from financing activites Net increase in cash and cash equivalents 64,000 (23,000) (22,000) 22,000 45,000 59,000 The following information is also available 1. Cash and cash equivalents at 31 December 2019, $4,000 REQUIRED: (a) The determine the cash and cash equivalents balances at 31 December 2018 and 2020 (2 marks) (b) Comment on the performance of the company in terms of cash generation over the period (8marks) two- year (c) Explain briefly how a company can be profitable but yet have liquidity problems (5 marks)
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