The financial statements of Bruno plc for 20X8 and 20X7 are as follows:

Note: retained earnings at 31st May 20X6 was 1,277m.

a) Using ten key ratios of your choice, analyse and discuss the financial performance of Bruno Plc as an investment prospect during the two years of 20X8 and 20X7. (Word count guidance: 500 600 words).

b) Identify and explain two limitations of ratio analysis as a tool for analysing a companys performance. (Word count guidance: 200 250 words).

Bruno plc income statements for the years ended 31 May 20X8 and 31 May 20X7 20X8 20X7 m m Revenue 13,663 12,249 Cost of sales 12,570 11,330 1,093 919 121 108 Gross profit Distribution and selling costs Administrative expenses Operating profit 240 225 732 586 Interest expense 84 69 Profit before tax 648 517 Taxation 162 129 Profit for the year 486 388 Bruno plc statements of financial position as at 31 May 20X8 and 31 May 20X7 20X8 20X7 m m Non-current assets 6,040 5,150 Current assets: Inventories 485 500 45 40 Prepayments Cash and cash equivalents Total assets 122 99 6,692 5,789 110 100 Equity: Share capital Share premium Retained earnings 145 140 1,861 1,525 Non-current liabilities: Long term borrowings 2,986 2,548 Current liabilities: 1,070 1,006 150 140 Trade payables Dividends payable Other payables Tax payable 200 180 170 150 Total equity and liabilities 6,692 5,789