ABC Plc is a women cloths shop. The company is based in Luton. Recently the company faced cash problems and approached your for advice. The following ratios were computed by their junior accountant

Current ratio2019=1:12018=2:1

Gross profit2019=69%2018=70%

Inventory turnover days2019=222018=20

Net profit management 2019= 14%2018=16&

Quick ratio2019=2:12018=3:1

GEARING RATIO2019=16%2018=11%

ROCE2019=21%2018=22%

TRADE PAYABLE SETTLEMENT DAYS2019= 262018= 22

TRADE RECEIVABLE SETTLEMENT DAYS2019=302018=34

INTEREST COVER 2019=32018=6

Required:

You are required to provide an analysis of the company performance by grouping the ratios and provide suggestions how they could improve their performance.List all assumptions you may require to provide your proposals. What are the limitations of analysing the ratios based on other factors?

Total Marks = 25 Marks