3. In part b, the ratio analysis problem addresses ROE. Discuss the following. a is a higher or lower ROE good? b. What can a fimm do to change ROE? c. How good is ROE as a metric in explaining stock price? d. Discuss share repurchases of stock relative to paying dividends and the effect on ROE. e. Steps that a firm can take to improve collection policy. Discussion should include (1) tradeoff between collection policy and sales and 42) the effects of slow collections on free cash flow (FCF). f. Identify at least three profitability ratios and discuss the role of profit as a metric in measuring company performance. Why do we not seek to maximize profit when discussing the role of a firm? Since higher profits are related to higher stock prices, what can a firm do to increase profits? Ratio CA/CL DSO COGS/Inventory Sales/FA Sales/TA NI/Sales NITA NI/common equity Total debtTA Total liabilities/TA Lozano Ratios 2.41 76.65 days 5.57 5.54 1.75 1.46% 2.56% 4.10% 11.67% 37.69% Industry Average 2.0 35.0 days 6.7 12.1 3.01 1.2% 3.6% 9.0% 10.0% 60.0%