Question I (Managing working capital) Wood Limited's 2020 financial statements were as follows: Wood Limited: Statement of profit or loss for the year ended 31 January 2020 2020- 2019 - Revenue 662.550 651,440 Cost of sales (477,400) (435,100 Gross profit 185,150 216.340 Expenses (150,690) (187.5903 Profit for the year 34,460 28,750 Note: Purchases for the year were 396,600 (2019: 377,440). Wood Limited: Statement of financial position at 31 January 2020 2020 - 2019. Assets Non-current assets 1.126,330 1,044,770 Current assets Inventory 99,4001 91.650 Trade receivables 86,700 89.400 Cash 16,070 18.850 202,170 199,900 Total Assets 1,3287.500 1.244.670 Equity and Liabilities Equity 791,630 757,170 Long-term liabilities 436,3401 400,000 Current liabilities Trade payables 67.530 65.500 Short-term borrowings 33.000 22.000 100.530 87,500 Total equity and liabilities 1,328,500 1.244.670 'turn over Required: a. Calculate Wood Limited's operating cycle for the year ended 31 January 2020 (average inventory, average trade receivables, average trade payables, average inventory turnover, average trades receivables turnover, average trade payables turnover, current ratio and gross profit margin for both years, turnover, operating cycle). (70 marks) b. Prepare a brief report to the company's directors about the company's working capital management. (Provide your answer in max 300 words - Five valid reasons, six marks per valid reason) (30 marks) Total 100 marks