Selected information from Small Company's financial statements follows.

Required:
1. Calculate the following ratios for 2018 and 2019:
(a) Gross profit margin,
(b) Operating margin,
(c) Net profit margin, and
(d) Accounts receivable turnover.
2. For each of the first three ratios listed above provide a plausible explanation for any differences that exist. (For example, why is the net profit margin higher or lower than it was the previous year?)
3. Explain what each ratio attempts to measure. Make an assessment about Small Company based upon the ratios you have calculated. Are operations improving or worsening?

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Fiscal Year Ended December 31 2019 2018 2017 (in thousands) $1,697,195 (3,055) (2,546) $1,691,594 891,027 $ 800,567 496,958 $ 303,609 (3,036) $ 300,573 $1,663,917 (2,995) (2,496) $1,658,426 881,876 $ 776,550 482,050 $ 294,500 3,534 $ 298,034 $1,714,167 (3,086) (2,571) $1,708,510 860,512 $ 847,998 487,214 $ 360,784 (1,804) $ 358,980 Gross sales Less: Sales discounts Less: Sales returns and allowances Net sales Cost of goods sold Gross profit Operating expenses Operating income Other income (expenses) Net income At December 31 2019 2018 2017 (in thousands) $365,109 (71,926) $293,183 Accounts receivable Less: Allowance for doubtful accounts $376,062 (8,461) $367,601 $341,223 (5,971) $335,252 Net accounts receivable