Problem: Laundry Ltd manufactures washing machines and dryers, which are sold to retailers. The abbreviated financial statements for 2019 and 2020 are as follows: Income statements for the year ended 30 April 2020 2019 2020 £ 000 £ 000 Revenue 5,600 10,800 Cost of sales (3,640) (7,992) Gross profit 1,960 2,808 Administration expenses (813) (1,202) Distribution expenses (65) (120) Operating profit 1,082 1,486 Interest (18) (190) Profit before tax 1,064 1,296 Tax (210) (260) Profit for the year 854 1,036 Statements of financial position as at 30 April 2019 2020 £ 000 £ 000 Non-current assets Property, plant and equipment 1,100 1,050 Current assets Inventories 652 654 Trade receivables 950 2,850 Cash 780 - 2,382 3,504 Total assets 3,482 4,554 Current liabilities Trade payables 430 1,750 Bank overdraft - 690 Tax liability 210 260 640 2,700 Non-current liabilities Bank loan 805 498 Equity Ordinary share capital of £ 1 (fully paid) 1,200 1,200 Retained earnings 837 156 2,037 1,356 Total equity and liabilities 3,482 4,554 Comment on the performance of Laundry Ltd from the viewpoint of a business considering supplying a substantial amount of goods to Laundry Ltd on usual trade credit terms.