The following information relates to the African Parade Spirits (APS) limited for financial year end 2020. STATEMENT OF FINANCIAL POSITION 2020 2019 R'000 R'000 ASSETS Non-current assets Property, plant and equipment Investments Current assets Cash and Bank Inventory Trade receivables Total assets 428 634 190 021 201 825 110 234 72 093 40 271 15 573 4 800 56 520 35 471 105 846 70 560 5 000 5000 16 391 10 271 40 129 25 200 South African Revenue Service 250 Shareholders for dividend 4 000 1 600 27 500 Total equity and liabilities 271 412 150 861 58 902 15 345 101 664 32 456 STATEMENT OF COMPREHENSIVE INCOME 2020 2019 271 412 150 861 Revenue (Gross sales) Gross profit Profit before finance charges and taxation Finance charges EQUITY AND LIABILITIES Capital and reserves Ordinary share capital 25 000 25 000 Share premium 26 400 26 400 13% Convertible preference shares 15 000 15 000 Distributable reserve 53 810 32 640 1. Non-current liabilities Long-term loan (15%) 8 000 8 000 2. Profit before taxation Taxation Profit for the period The following information is also presented: Inventory, trade receivables and trade payables are at levels that could be considered average for the year. APS has been too lenient with regards to receivable collections during the last year and this has caused significant increases in the receivables balance. 12% Redeemable preference shares 30 000 30 000 3. Deferred tax 290 190 All inventory is purchased from suppliers on credit. Current liabilities Bank overdraft (25%) Trade payables 43 092 65 820 11 971 The convertible preference shares are convertible into ordinary shares at the discretion of the directors. 5. 6. The growth in property, plant and equipment is largely due to the expansion of the company's fleet of delivery vehicles as well as an investment in a new warehouse. These investments were paid for in cash. Only 10% of revenue is cash sales, the remaining 90% of sales take place on a credit plan allowing interest free repayments of up to 60 days. REQUIRED: Evaluate the performance of APS Ltd from 2019 to 2020, with reference to relevant financial ratios. Where you deem it appropriate, provide recommendations for improvements. Your evaluation should focus on Liquidity issues . Debt management Efficiency Presentation (6) (6) (11) (2) Hint: Recommendations for improvements must be concise and to the point in bullet format. Three bonus marks are available for insightful comments or suggestions.