12 Which of the following statements are limitations of ratio analysis? (1) Ratio analysis may result in false results if variations in price levels are not considered. (2) Ratio analysis ignores qualitative factors. (3) Ratio Analysis ignores quantitative factors. (4) Ratio Analysis is historical analysis. (1), (3) and (4) (1), (2), (3) and (4) (1), (2) and (4) (1), (2) and (3) QUESTION 13 The following information relates to two companies Profit after tax P/E ratio Alpha plc 200,000 16 Beta plc 800,000 21 The management of Beta estimate that if they acquire Alpha they could save an after tax cost of 100,000 annually. Additionally, they estimate that the P/E ratio of the new company would be 20. On the basis of these estimates, what is the maximum price that Beta plc should offer for Alpha? 6.3m 5.2m 4.2m 2.0m