Compute four ratios that measure the ability to earn profits for Elk Ranch Ltd., whose comparative income statement appears below. Additional data follow.

Did the company’s operating performance improve or deteriorate during 2020?

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ELK RANCH LTD. Income Statement For the Years Ended December 31, 2020 and 2019 2020 2019 Net sales $195,000 $174,000 Cost of goods sold 101,500 91,750 Gross margin 93,500 82,250 Selling and general expenses 50,200 40,000 Income from operations 43,300 42,250 Interest expense 25,400 12,050 Income before income tax 17,900 30,200 Income tax expense 4,475 7,550 Net income $ 13,425 $ 22,650