Question: Write a response to a company given below discussing its profitability, debt paying ability, and liquidity. Also, what strategic decisions should be made by the firm to support the improvement?

AutoZone Companys Scenario:

AutoZones financial statements indicate the following:

1. There is a net profit margin of 14.5%.
2. The firms long-term debt has increased significantly over the past year and could impact its future debt-paying ability if it continues to increase.
3. Additionally, AutoZones liquidity ratio of 0.79 is alarming because a ratio below 1 suggests that the company is having difficulty meeting its short-term financial obligations.