$03.$ PQ PLC is in the business of manufacturing and selling mens sportwear in sri lanka. With increased competition in the market, the company management implemented a strategy of product differentiation. The company conducted certain research in $2021$ incurring Rs $25$ million and was able to develop and market a differentiated product in place of its existing product since the beginning of the year $2022.$ The new product required a significant upgrade to the existing machinery with the use of the latest technology. The following financial reports have been calculated from the financial statements of PQ PLC$.$ The companys products are priced adding a profit to the total manufacturing cost. The profit margin kept during the years from $2019$ to $2021$ was $30\%,$ which however could be increased to $35\%$ during the year $2022$ in the light of differentiated products offered to the market.

$20192020202120222023$

Sales in rupees million $345340330380425$

Gross margin $20\mathrm{.}90\%21\mathrm{.}40\%22\mathrm{.}30\%32\mathrm{.}20\%33\mathrm{.}90\%$

Selling and administrative expenses as a $\%$ of sales $10\mathrm{.}30\%10\mathrm{.}10\%16\mathrm{.}40\%27\mathrm{.}90\%22\mathrm{.}70\%$

Opearting assets turnover $($times$)1\mathrm{.}141\mathrm{.}040\mathrm{.}930\mathrm{.}840\mathrm{.}67$

Trade receivable turnover $5\mathrm{.}295\mathrm{.}355\mathrm{.}384\mathrm{.}514\mathrm{.}11$

Inventory turnover $4\mathrm{.}434\mathrm{.}234\mathrm{.}094\mathrm{.}374\mathrm{.}75$

Trade payable turnover $10\mathrm{.}3611\mathrm{.}7810\mathrm{.}4611\mathrm{.}1314\mathrm{.}84$

Property $,$ plant and equipment turnover $1\mathrm{.}801\mathrm{.}601\mathrm{.}341\mathrm{.}200\mathrm{.}91$

a$.$ Perform an analysis of the companys profitability and liquidity for the year $2021,2022$ and $2023.$

b$.$ Explain two areas that should be a matter of managerial concern.

c$.$ Explain how the company$$s profitability and liquidity would be affected by the likely economic conditions in the country in the future.