The summarised financial statements of Sal Limited are as follows:

Profit & Loss Account/Income Statement for the year ended 31 December 2019	000
Operating profit	150
Investment income	10
Interest payable	(27)
Profit before taxation	133
Taxation	(46)
Profit after taxation	87
Dividends payable	(60)
Retained profit	27

Balance Sheets	2019	2019	2018	2018
	000	000	000	000
Fixed/Non-current assets
Cost		252		270
Depreciation		(60)		(70)
		192		200
Current assets
Stock/inventory	175		140
Trade debtors/receivables	150		135
Short-term deposits	100		110
Bank			20
		425		405
Current liabilities
Trade creditors/payables	125		100
Interest payable	8		20
Taxation payable	10		20
Dividends payable	17		25
Bank	10
		(170)		(165)
Non-current liabilities
Loans		(120)		(170)
NET ASSETS		327		270
Shareholders Funds
Share capital		130		110
Share premium account		50		40
Retained profits		147		120
		327		270

Additional information

A fixed/non-current asset which originally cost 78,000 and had accumulated depreciation as at the date of sale of 40,000 was sold for a loss of 10,000.

Required

1. Prepare Sal Ltd.s cash flow statement using the indirect method for the year ending 31st December 2019, showing clearly how cash and cash equivalents changed during the year.

[22 marks]

2. Using the summarised accounts given, and the statement you have just prepared, comment on the position, progress and direction of Sal Ltd.

(Maximum word count: 100 words)

[3 marks]