QUESTION 6 The following information was presented to you as a financial manager of Sabaq Ja Corporation, by one of the members of Board of Directors who seeks further explanation on the company's performance for financial year ended 31 December 2016, 2017 and 2018 Financial Ratios 2018 2017 2016 Current ratio 2.51 times 2.22 times 2.05 times Quick ratio 0.95 times 0.77 times 0.68 times Account receivable tumover 5.67 times 5.04 times 475 times Inventory turnover 11.45 times 9.05 times 8.52 times Debt ratio 76.89 percent 70.77 percent 68.56 percent Debt to equity ratio 30.06 percent 41.31 percent 45.86 percent Gross profit margin 75 percent 72 percent 69 percent Net profit margin 29.5 percent 27.6 percent 23.6 percent Return on total asset 10 percent 9.54 percent 8 percent Return on equity 12 percent 11 percent 9.56 percent Hak Cipta Universiti Teknolog MARA CONFIDENTIAL CONFIDENTIAL BA/DEC 2013/FIN658/665 a) Explain the liquidity position of the company by considering the current ratio, quick ratio and account receivable turnover. (4 marks) b) If the company plans to do a financing, which financing would be more suitable, debtor equity financing? Give your suggestion by relating to the company's profitability performance