Bright Limited has the following results for the last two years of trading.

Bright Limited
Statement of Comprehensive Income for the Year Ended 2018
	31/12/18	31/12/17
	GH000	GH000
Sales	14,400	17,000
Less: Cost of sales	(11,800)	(12,600)
Gross profit	2,600	4,400
Less expenses	1,200	2,000
Net profit for the year	1,400	2,400
Dividend paid	520	780
Retained profit for the year	880	1,620

Edwards Limited
Statement of Financial Position
	31/12/18			31/12/17
		GH000	GH000	GH000	GH000
Non-current assets			2,500		4,000
Current assets
Receivable		1,300		2,000
Cash		2,000		1,600
Inventory		2,400	5,700	820	4,420
Total assets			8,200		8,420
Financed by:
Stated capital		2,400		2,400
Capital surplus		500		500
Income surplus		1,200	4,100	2,820	5,720
Non-current liabilities
Non-current liability: 10% loan notes			2,600		-
Current liabilities
Payable			1,500		2,700
Total equity and liabilities			8,200		8,420

Required:

1. Calculate three profitability ratios for each year.
2. Calculate three liquidity ratios for each year.
3. Compare the profitability and liquidity ratios of the second year (2018) to the first year (2017).
4. Explain three limitations inherent in ratio analysis.