(a)List the main advantages of ratio analysis.(3 Marks)

(b)The summarized financial statements of Baraka Enterprises Ltd. are as follows:

INCOME STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER:

2017

2018

Kshs. '000'

Kshs. '000'

Sales

20,000

28,000

Cost of sales

(15,000)

(21,000)

Gross profit

5,000

7,000

Administrative expenses

(3,800)

(4,600)

Debenture interest

-

(400)

Net profit

1,200

2,000

STATEMENT OF FINANCIAL POSITION