Reference no: EM132545400

The following table provides a historical summary of key financial ratios for Reza Corporation.

Ratio                                        2017               2018                   2019

Return on Equity                 10.8%               -3.1%            -1.4%

Return on assets                   3.0%               -0.8%             -0.3%

Cost of sales to sales              75.6%                 78.5%          74.8%

R&D expenses to sales               6.3%                   6.9%          6.6%

Earnings before interest, tax

and depreciation to sales                10.2%             2.3%             5.6%

Debt to total assets                         72.4%           75.3%              76.9%

Required:

Question a. With reference to the appropriate ratios, analyse the trend in Reza Corporation's profitability providing plausible reasons for any changes.

Question b. Explain what an inventory turnover ratio is measuring and how inventory turnover impacts on Reza Corporation's profitability.

Question c. Reza Corporation publishes on its website and discloses key corporate social responsibility (CSR) activities and important topics of interest to stakeholders. Describe an environmental performance indicator and a social performance indicator that may be of interest to Reza Corporation's stakeholders.