The company is preparing its cash flow statement for the year ended 31 October 2016 Sugar Co Income statement for the year ended 31 October 2016 $000 Revenue 54,577 Cost of sales (27,128) Gross profit 27,449 Distribution costs (9,146) Administrative expenses (5,766) Profit from operations 12,537 Interest received 101 Finance cost (1,749) Profit before tax 10,889 Taxation (2,570) Profit for the period 8,319 Balance sheets as at 31 July 2016 2015 Assets $000 $000 Non-current assets Cost 133,152 124,252 Accumulated depreciation (30,978) (25,629) 102,174 98,623 Current assets Inventory 26,350 29,365 Trade receivables 13,412 16,446 Bank 2,955 3,036 42,717 48,847 Total assets 144,891 147,470 Equity and liabilities Capital and reserves Ordinary share capital 23,576 21,082 Share premium 11,982 10,245 Revaluation reserve 12,554 6,029 Retained earnings 58,532 53,910 106,644 91,266 Non-current liabilities 7% loan notes 5,743 22,632 Current liabilities Bank overdraft 6,869 7,842 Trade payables 23,534 23,804 Taxation 2,101 1,926 32,504 33,572 Total equity and liabilities 144,891 147,470 Additional Information During the year dividends paid were $3,697,000. There were no amounts outstanding in respect of interest payable or receivable as at either year end. Operating profit is stated after charging depreciation of $6,784,000. During the year, the company sold equipment for $5,667,000 realising a profit of $1,806,000. This equipment had never been revalued, and there were no other disposals of non-current assets during the year. The only revaluation of non-current assets was that of a piece of freehold land. 

Required: 

Prepare a cash flow statement for Sugar Co. for the year ended 31 October 2016 in accordance with IAS 7 – Cash Flow Statements, using the indirect method. (16 marks) Comment on the financial performance and position of Sugar Co. as shown by the cash flow statement you have prepared. (4 marks)