For 2009 and 2010, compute the four ratios that measure the ability to earn profits for Fabulous Fashions, Inc., whose comparative income statement follows:

Requirement 1. Did the company’s operating performance improve or deteriorate during 2010?

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Fabulous Fashions, Inc. Income Statement Years Ended December 31, 2010 and 2009 2010 2009 Net Sales $261,000 $237,000 Cost of Goods Sold 140,000 132,000 Gross Profit 121,000 105,000 Selling and General Expenses 72,000 65,000 Income From Operations 49,000 40,000 Interest Expense 32,000 15,000 Income Before Income Tax 17,000 25,000 Income Tax Expense 5,000 8,000 Net Income $12,000 $ 17,000