The following are the summarized financial statements of Alpha and Omega, two companies that operate in the same industry:

Required
a. Using ratio analysis, comment on the profitability, efficiency, liquidity and gearing of both companies.
b. List three limitations of ratio analysis for the purposes of interpreting financial statements.

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ASSETS Non-current assets Current assets Inventories Trade receivables Bank Sammarized statement of financial position Alpha £m Total assets EQUITY AND LIABILITIES Equity Capital Retained earnings Total equity Non-current liabilities Loan Current liabilities Trade payables Bank overdraft Total current liabilities Total liabilities Total equity and liabilities 790 1,200 720 190 2,110 2,900 1,160 340 1,500 500 900 900 1,400 2,900 Omega £m 1,000 1,800 1,200 3,000 4,000 1,756 404 2,160 1,040 800 1,840 1,840 4,000