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Provide an analysis of the company performance

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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 ratio  2019=1:1  2018=2:1

Gross profit    2019=69%   2018=70%

Inventory turnover days   2019=22  2018=20

Net profit management     2019= 14%      2018=16&

Quick ratio     2019=2:1      2018=3:1

GEARING RATIO    2019=16%       2018=11%

ROCE          2019=21%     2018=22%

TRADE PAYABLE SETTLEMENT DAYS   2019= 26      2018= 22

TRADE RECEIVABLE SETTLEMENT DAYS    2019=30 2018=34

INTEREST COVER     2019=3   2018=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?

Reference no: EM132616607

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