Please help to answer Q2 (A, B, C questions), thank you so much. You can refer to the sample answers to write the anwers.

A. Based on the calculation in part 1A, the profit margin dropped dramatically from the year ended January 29,2022 , to January 28,2023 . What does the drop imply, and what are the possible reasons for the decline? (25 marks) B. Based on the calculation in part 1B, the current ratio and times interest earned ratios have decreased from the year ended January 29,2022 , to January 28,2023 . What does the change imply, and what could be the possible reasons for the change? (25 marks) C. Overall, if you are the investor, would you invest in Abercrombie \& Fitch Co, given the information included in the Annual Report and external sources? Provide justification to support your answers. (10 marks) Item 8. Financial Statements and Supplementary Data Abercrombie \& Fitch Co. Consolidated Statements of Operations and Comprehensive (Loss) Income (Thousands, except per share amounts) Abercrombie \& Fitch Co. Consolidated Balance Sheets (Thousands, except par value amounts) Abercrombie \& Fitch Co. Consolidated Statements of Stockholders' Equity Abercrombie \& Fitch Co. Consolidated Statements of Cash Flows (Thousands) Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD\&A") generally discusses our results of operations for Fiscal 2022 and Fiscal 2021 and provides comparisons between such fiscal years. For discussion and comparison of Fiscal 2021 and Fiscal 2020, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for Fiscal 2021, filed with the SEC on March 28, 2022. This MD\&A should be read together with the Company's audited Consolidated Financial Statements and notes thereto included in this Annual Report on Form 10-K in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA." to which all references to Notes in MD\&A are made. INTRODUCTION MD\&A is provided as a supplement to the accompanying Consolidated Financial Statements and notes thereto to help provide an understanding of the Company's results of operations, financial condition, and liquidity. MD\&A is organized as follows: - Overview. A general description of the Company's business and certain segment information, and an overview of key performance indicators reviewed by management in assessing the Company's results. - Current Trends and Outlook. A discussion of the Company's long-term plans for growth and a summary of the Company's performance over recent years, primarily Fiscal 2022 and Fiscal 2021. - Results of Operations. An analysis of certain components of the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income for Fiscal 2022 as compared to Fiscal 2021. - Liquidity and Capital Resources. A discussion of the Company's financial condition, changes in financial condition and liquidity as of January 28, 2023, which includes (i) an analysis of changes in cash flows for Fiscal 2022 as compared to Fiscal 2021, (ii) an analysis of liquidity, including availability under the Company's credit facility, and outstanding debt and covenant compliance and (iii) a summary of contractual and other obligations as of January 28, 2023. - RecentAccounting Pronouncements. The recent accounting pronouncements the Company has adopted or is currently evaluating, including the dates of adoption or expected dates of adoption, as applicable, and anticipated effects on the Company's audited Consolidated Financial Statements, are included in Note 2 "SUMMARY OF SIGNIFICANI ACCOUNTING POLICIES:" - CriticalAccounting Estimates. A discussion of the accounting estimates considered to be important to the Company's results of operations and financial condition, which typically require significant judgment and estimation on the part of the Company's management in their application. - Non-GAAP Financial Measures. MD\&A provides a discussion of certain financial measures that have been determined to not be presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). This section includes certain reconciliations between GAAP and non-GAAP financial measures and additional details on non-GAAP financial measures, including information as to why the Company believes the non-GAAP financial measures provided within MD\&A are useful to investors. Above average: "Another possible reason for the improvement in GAP's performance is effective cost management. With reduced store sales due to the pandemic, GAP closed underperforming stores to reduce operating expenses. It also implemented other measures to cut costs. For example, Comments: The student was able to describe the change of the financial ratio and explained the possible reasons for the change based on the annual report of the company. Average: "The gross profit ratio increased by 5.72% from 34.09% in 2020 to 39.81% in 2021 . indicating that the company generated more profits from its sales. This increase may be due to the company selling its products at higher prices or reducing its cost of goods sold." Comments: The student was able to describe the change of the financial ratio and explained the possible reasons for the change. However, the student only used the word "may" and the explanation was not based on the annual report of the company, Below average: "In terms of return on assets, it increased from 4.8% to 1.9%. It can be seen that GAP has a higher return on investment, earning more per dollar invested in the assets owned. Therefore, GAP has a higher amount earned in fiscal year 2021 than 2020, meaning that its profitability is also higher, the company's performance has improved." Comments: The student was able to describe the change of the financial ratio and the definition of the financial ratio. The student, however, failed to identify and explained the possible reasons for the change