The following table provides an historical summary of key financial ratios for Somy Corporation.

a. With reference to the appropriate ratios, analyse the trend in Somy’s profitability providing plausible reasons for any changes.
b. The CEO of Somy Corporation noted the following:
Somy Corporation plans to maintain tight inventory controls heading into the crucial year-end shopping season . . . Somy implemented tighter inventory controls to prevent the type of punishing losses from slow demand that forced deep discounting or write-downs for unsold goods. It slashed inventory turnover during last year’s October–December quarter to 38 days from 61 days a year ago.
Explain what an inventory turnover ratio is measuring and how inventory turnover impacts on Somy’s profitability.
c. Somy Corporation publishes on its website and discloses key 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 Somy’s stakeholders.

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Ratio Return on equity Return on assets Cost of sales to sales Research and development expenses to sales EBITDA to sales* Debt to total assets 2015 10.8% 3.0% 75.6% 6.3% 10.2% 72.4% 2016 -3.1% -0.8% 78.5% 6.9% 2.3% 75.3% 2017 -1.4% -0.3% 74.8% 6.6% 5.6% 76.9%