Prior to beginning work on this discussion, begin reading Chapter 3 in the textbook about income statements and statements of stockholders' equity. Also, read the information about defining and interpreting income statements in the eBook, The Comprehensive Guide on How to Read a Financial Report: Wringing Vital Signs Out of the Numbers.

Present the reasons that could explain an increase or decrease in gross profit margin. In your discussion, explain how a company could have a decreasing gross profit margin but an increasing operating profit margin. Give examples whenever possible to illustrate your point and reference credible sources as appropriate to support your statements.