Question 3 (25 Marks) The Cena and Lesnar, a retail clothier, has had average sales of $400,000 for the last five years, 2019-2015. The firm's total assets at the end of 2017 were $400,000. An internal staff cost analyst has prepared the following financial data from the annual reports. You have been hired as a consultant to help analyze the financial position. Current Ratio Acid Test Ratio Days' Sales in Receivables Merchandise Inventory Turnover Debt Ratio Times Interest Earned Sales as a Percent of 1996 Sales Net Income as a Percent of 1996 Income Gross Profit Margin Operating Expenses to Net Sales Net Profit Margin Return on Total Assets 2019 2.80 2.03 61 4.20 0.48 4.60 1.46 2018 2.43 1.93 58 4.10 0.50 4.80 1.23 2017 2.36 1.82 54 4.10 0.49 5.90 1.12 2016 2.10 1.61 42 3.90 0.47 5.70 1.06 2015 2.00 1.47 35 3.70 0.47 6.00 1.00 1.31 38.5% 11.4% 7.6% 9.4% 1.20 38.8% 11.3% 8.6% 9.6% 1.10 38.9% 11.5% 8.9% 9.6% 1.06 40.0% 11.4% 9.4% 10.0% 1.00 39.7% 11.7% 9.3% 10.7% a. c. Required: Explain the trend in liquidity. Make specific reference to the effect of receivables and inventory on this trend. b. Briefly describe the trend in the long-term, debt-paying ability of Cena and Lesnar. Explain the cause(s) of this trend. Cena and Lesnar net profit margin has declined substantially. Cite and discuss specific causes of this. d. Have Cena and Lesnar utilized its total assets effectively? Discuss the ability of Cena and Lesnar to generate sales based on total assets. (Use DuPont analysis.) Specifically cite and briefly describe two additional types of information that would aid in your analysis. e