[kuchkarov]

Hi sir,

I have one unclear point regarding this question. In the answer it shows all relevant figures and states that there is a sign of overtrading for part b. However, since the sales increased only by 40% while the inventory, receivables and payables rose by more than 100% percent, I thought that there is no overtrading, on the contrary, it is the signs of overcapitilazation. Thus, can you please help me understand why we should see these increases as a sign of overtrading.

Thank you in advance for your help and answer.

[Author]

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