Question Credit and Finance Q Banks often pick up warning signs regarding a customer from the conduct of their account or from interviews/visits. In addition, there is a need for financial information to be supplied by the customer. Can you identify 4 warning signs that might cause concern to a banker in respect of this financial information (excluding ratio analysis/trends) and provide brief comment as to why these would be of concern? (12 marks) (b) If a company is suffering from cashflow difficulties largely due to a slow turnover of stock, what remedial action might the business take to improve its cashflow in this area? (4 marks) (c) You have received the latest annual accounts of your customer Ray Ling Ltd, manufacturers of fencing materials. As part of your analysis, you are looking to review the performance of the business against 2 financial covenants which had been agreed for monitoring and control purposes. These covenants are: · Net Worth – 'The company is to maintain its tangible net worth at a minimum level of £60,000 from 31/07/13 and £70,000 from 31/07/14'. · Debtors Covenant – 'Trade Debtors must be maintained at a minimum level of 200% of overdraft borrowing at all times'.