Explain three (3) limitations of the balance sheet, and suggest the fundamental manner in which a company can overcome each such limitation. Provide a rationale for your suggestions.

Suppose you are the senior financial analyst at your company, and at the end of each month you are required to analyze the company's profitability. Prepare a report to management that identifies ratios that are important to a company's profitability. Assume that the ratios are unfavorable. Recommend to management one (1) way in which it can improve the company's profitability ratios.