In the year ended 31 December 1995, the profits before tax of Jazz Ltd was $157,250 and the profits chargeable to income tax were %180,000. The share capital of the company was as follows No. of shares Issued Market value 5% cumulative preference shares of $1 each 150,000 35 cents Ordinary shares of 50c each 800,000 95 cents The dividend paid or proposed for the year amounted to 3.5 cents per preference share and 5.0 cents per ordinary share. Required. (a). Calculate in respect of ordinary shares providing brief explanation of each: (i). Dividend cover (ii). Earnings per share (iii). Price/earnings ratio (iv). Market Capitalization (b). Ratio analysis is acceptable as a very useful technique in evaluating performance of business units. What limitations need to be considered before it is applied mechanically