Question:

Ridgeway Ltd is a company that has manufactured steel shelving systems for sale to retail customers. In 2017 the directors decided following the Brexit vote to expand into the industrial market. On 1 April 2018 it raised a five year loan of 6.4m at 8% interest +with repayments starting on 1 April 2019, invested 8m in new plant which became fully operational on that date and undertook an advertising campaign in trade journals. Sales increased and the company paid a dividend of 524,000 on 1 October 2018.

Draft statements of financial performance and position are as follows:

Required

(a) Prepare a statement of cash flows for the year ended 31 March 2019.

(b) Explain the points you would raise when approaching the bank seeking to maintain the bank overdraft at its current level.

Please proper explain and do not copy from Chegg. Otherwise I have to report the answer.