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In the spring of 2010, Paul Cruz was a business student who had just started an accounting course. As an introductory assignment, his professor had given the each student the task of analyzing the financial statements of a company of their choosing For his analysis, Cruz selected BNL Stores because it was one of his favorite places to shop. However, recently he had read in the business press that BNL's stock had fallen dramatically, dropping from a high of $100 per share to less than $10, despite the fact that the company was known to pay out relatively constant dividends to its shareholders BNL was an established Midwestern retailer that had been in business for over 40 years. In recent times, management had undertaken a series of new business strategies, one of which was to expand the number of BNL's new supercenter stores, while phasing out the traditional discount stores. The supercenter stores carried a greater selection of durable goods, such as appliances and furniture. In order to entice customers to purchase these i Each individual store manager was responsible for authorizing the opening of store credit accounts and ultimately had the final say as to whether credit would be granted to a customer. Store managers were paid an annual bonus, based on net income for their respective store, and were known for being quite lenient in granting credit in order to increase net income for the year and, therefore, the size of their bonus more expensive items, BNL had started offering store credit to its customers. Cruz wondered whether these new strategies were responsible for the decline in BNL's share price, which he had read about. To collect the financial statement information that he required to complete his assignment, he went to the business school library and obtained BNL's balance sheets, statements of income, and statements of cash flows for the fiscal years ending 2002 through 2007. However, for 2008 to 2010, he was able to obtain income the balance sheets and statements of income, but not statements of cash flows (see Exhibits 1, 2 and 3) How has BNL developed fro m 2002 to 2010 in terms of 1. profita bility (see BNL Stores In come Statement) and 2. liquidity risk (se e BNL Stores Income Statement, Balance Sheet, and State ment of C ash Flo ws)? PLEASE PROVIDE 5 BULLET POINTS FOR EACH

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