QUESTION 1 Kaduna Textile Mills Plc (KTM) is a manufacturing company listed on the Nigerian Exchange Group (NGX). The company produces a range of cotton fabrics for both domestic and export markets. The Finance Director, Alhaji Musa Tanko, is concerned about the company's liquidity position and has asked you, the newly appointed Financial Controller, to review the working capital management practices. The following information relates to the financial year ended 31 December 2023: Extract from the Income Statement: - Revenue: ₦480,000,000 - Cost of Sales: ₦320,000,000 - Gross Profit: ₦160,000,000 Extract from the Statement of Financial Position as at 31 December 2023: - Inventories: ₦64,000,000 - Trade Receivables: ₦96,000,000 - Cash and Cash Equivalents: ₦8,000,000 - Trade Payables: ₦48,000,000 - Short-term Bank Overdraft: ₦12,000,000 Additional information for the prior year (31 December 2022): - Inventories: ₦52,000,000 - Trade Receivables: ₦72,000,000 - Trade Payables: ₦40,000,000 Industry average benchmarks: - Inventory Days: 60 days - Receivables Days: 55 days - Payables Days: 45 days Required: (a) Calculate the Cash Conversion Cycle (CCC) for KTM Plc for the year ended 31 December 2023, using year-end balances. Comment briefly on what the CCC indicates about the company's liquidity. (8 marks) (b) Compare KTM's working capital ratios (Inventory Days, Receivables Days, and Payables Days) with the industry averages and identify TWO specific areas of concern, suggesting ONE practical improvement measure for each area identified. (7 marks) (c) Explain FOUR sources of short-term finance available to KTM Plc to bridge any working capital funding gap, highlighting the suitability of each source in the Nigerian business environment. (10 marks) Total: 25 marks