Bath Ltd. (Bath) is a biotechnology company established in Hong Kong since year 2000. It went listed three years ago. Bath primarily engages in the research and production of skin-care products as well as dietary supplement. The company previously focused on the U.S. and European Markets. But with the fund raised on the stock market, it recently started to expand its market in the Greater China area (regions including mainland China, Hong Kong, Macau and Taiwan). Extracts from the accounts of Bath for the year ended 31 March 2019 and selected financial ratios there from are presented below: (in Hong Kong dollars) Turnover: Local & Mainland Overseas Cost of Goods Sold: Local & Mainland Overseas Promotional Expenses: Local & Mainland Overseas Research & Development Expenses Current Ratio Acid Ratio Cash to Current Assets Current Asset / Total Asset Property, Plant & Equipment / Total Asset Operation Margin Net Margin Return on Assets Return on Equity Debt / Equity 2019 263,500,000 1,135,450,000 166,350,000 382,370,000 38,600,000 14,500,000 35,000,000 2.52 1.75 16% 0.65 0.26 36% 23% 22% 17% 52% 2018 16,000,000 1,254,360,000 14,250,000 426,650,000 12,000,000 13,000,000 48,000,000 2.86 2.43 15% 0.53 0.36 32% 24% 20% 22% 40% Bath claims that the company is getting even more business opportunities by expanding into the Asian market. But some financial analysts query its profitability and liquidity situation. You are required to: A. Discuss the possible difficulties in analyzing Bath with reference to its published financial reports (assuming that you can obtain the full set of published financial report). (15 marks) B. Comment on the profitability and liquidity of Bath with regard to the extracted historical data. You may make your own assumptions when necessary. (25 marks) C. Discuss potential chances and obstacles that Bath may have in the near future. You may wish to look at both internal and external factors that are relevant to its potential growth. (10 marks)