Company XYZ$,$ a retail company, provides the following financial information for the

fiscal year ending December $31,2023$:

$$ Net Sales: $2,500,000$

$$ Cost of Goods Sold: $1,200,000$

$$ Gross Profit: $1,300,000$

$$ Operating Expenses: $700,000$

$$ Net Income: $500,000$

$$ Total Assets: $3,000,000$

$$ Total Liabilities: $1,200,000$

Shareholders' Equity: $1,800,000$

Identify the type of ratio that can be calculated using the provided financial information.

Calculate the ratio and interpret its meaning in terms of Company XYZ$\text{'}$s financial

performance. Additionally, discuss the limitations of ratio analysis and how these limitations

may impact the interpretation of financial ratios.