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 GHC000 Sales 14,400 Less: Cost of sales (11,800) Gross profit 2,600 Less expenses 1,200 1,400 Net profit for the year Dividend paid 520 8 Retained profit for the year 880 Edwards Limited Statement of Financial Position 31/12/18 GHC000 GHC000 GHC000 Non-current assets 2,500 Current assets Receivable 1,300 2,000 Cash 2,000 1,600 Inventory 2,400 5,700 820 Total assets 8,200 Financed by: Stated capital 2,400 2,400 Capital surplus 500 500 Income surplus 1,200 4,100 2,820 Non-current liabilities Non-current liability: 10% loan 2,600 notes Current liabilities Payable 1,500 Total equity and liabilities. 8,200 Required: (a) Calculate three profitability ratios for each year. (b) Calculate three liquidity ratios for each year. (c) Compare the profitability and liquidity ratios of the second year (2018) to the first year (2017). (d) Explain three limitations inherent in ratio analysis. 31/12/17 GHC000 17,000 (12,600) 4,400 2,000 2,400 780 1,620 31/12/17 GHC000 4,000 4,420 8,420 5,720 2,700 8,420 (3 marks) (3 marks) (6 marks) (3 marks) (15 marks)