Question 5b
Marking Guide

Up to 1 mark per explanation of why this could indicate going concern problems, if just identify indicator then max of ½ mark, overall maximum of 6 indicators.

New competitor taking market share from Clarinet
Loss of large customer
Loss of specialist staff
Main supplier ceased to trade
Shareholders refused to provide further finance for product development
Overdraft facility due for renewal and increased significantly
Cash flow shows worsening position
Customer potentially suing for loss of revenue

Max marks 6

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