8.44 Interpreting ratios. LO4, 7,9 The following table provides a historical summary of key financial ratios for Homer Corporation. Ratio Return on equity 2018 2020 2019 -3.1% 10.8% -1.4% Return on assets 3.09 -0.8% -0.3% 75.6% 78.5% 74.8% Cost of sales to sales Research and development expenses to sales EBITDA to sales 6.3% 6.9% 6.6% 10.2% 2.3% 5.6% Debt to total assets 72.4% 75.3% 76.9% * EBITDA is earnings before interest, tax and depreciation. Required (a) With reference to the appropriate ratios, analyse the trend in Homer Corporation's profitability, providing plausible reasons for any changes. (b) The CEO of Homer Corporation noted the following: Homer Corporation plans to maintain tight inventory controls heading into the crucial year- end shopping season... Homer 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 tumover impacts on Homer's profitability. (c) Homer 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 Homer's stakeholders. EEEEEE