Your manager gives you the following summary of key statistics for Simply plc a clothing retailer, for the five years 2016/17 to 2020/21. FIVE YEAR SUMMARY OF KEY STATISTICS 2017 2018 2019 2020 2021 INVESTMENT RATIOS Dividend per share (pence) 23.40 26.17 34.24 40.45 47.82 Dividend yield 3.14% 2.21% 1.62% 1.89% 1.59% Dividend cover (times) 1.80 1.91 1.96 2.03 2.10 Basic EPS (pence) 42.17 49.90 67.16 82.03 100.65 Price/earnings (years) 17.67 23.75 31.43 26.10 29.90 PROFITABILITY RATIOS Return on equity Return on capital employed Capital turnover (times) Operating profit margin Gross profit margin 20.61% 21.84% 25.75% 25.50% 25.63% 28.02% 29.70% 35.33% 35.40% 25.68% 2.49 2.56 2.87 2.76 1.97 11.26% 11.60% 12.30% 12.84% 13.01% 61.31% 62.38% 61.65% 60.69% 59.85% LIQUIDITY RATIOS Current ratio (:1) 1.98 1.72 1.61 1.75 1.75 Acid test ratio (:1) 0.86 0.68 0.71 0.53 0.60 EFFICIENCY RATIOS Inventory holding period (months) 7.46 8.48 7.82 8.75 8.21 Trade receivables collection period (months) 1.10 0.92 0.86 0.80 0.79 Trade payables payment period (months) 2.29 2.77 2.14 2.54 2.07 SOLVENCY RATIOS Debt/equity (gearing) 1.67% 0.50% 0.00% 0.00% 33.93% Interest cover (times) 116.68 45.69 30.95 42.03 41.52 a) Write a short report that identifies the strengths and weaknesses of the company as revealed by this five-year summary. [30 marks] b) Discuss the benefits and limitations of ratio analysis. [20 marks] [Total 50 marks]