Question 2 Part A Assume that Nivada, a computer manufacturer, is considering the following planned events: 1. To issue more preferred stock and uses proceeds to reduce accounts payable. 2. To have a stock split. 3. To converts to just-in-time inventory system (JIT). This allows them to hold half the levels of inventory for the same amount of sales (sales themselves are not increased by this change to JIT). Required: Evaluate the effects of each of the above events on the following ratios of Nivada: (a) Return on assets (ROA), (b) Return on common stockholders' equity (ROCE), and (c) Earnings per share (basic). Consider each planned event independently and explain your answer. (10 marks) Part B You are analyzing the financial statements of Nivada. You notice that accounts receivable turnover this year is significantly lower than prior years. Required: Provide three explanations that would be consistent with your observation. Explain whether these would be of concern to you. (10 marks)