Problem 5-87B (Algorithmic) Ratio Analysis

Selected information from Small Company's financial statements follows.

		Fiscal Year Ended December 31
		2019		2018 (in thousands)		2017
Gross sales		$1,663,917		$1,697,195		$1,714,167
Less: Sales discounts		2,995		3,055		3,086
Less: Sales returns and allowances		2,496		2,546		2,571
Net sales		1,658,426		1,691,594		1,708,510
Cost of goods sold		881,876		891,027		860,512
Gross profit		776,550		800,567		847,998
Operating expenses		482,050		496,958		487,214
Operating income		294,500		303,609		360,784
Other income (expenses)		3,534		(2,976)		(1,804)
Net income		$298,034		$300,633		$358,980
		At December 31
		2019		2018 (in thousands)		2017
Accounts receivable		$376,062		$365,109		$341,223
Less: Allowance for doubtful accounts		8,461		71,926		5,971
Net accounts receivable		$367,601		$293,183		$335,252

Required:

1. Calculate the following ratios for 2018 and 2019. Round your answers to two decimal places.

		2018		2019
a.	Gross profit margin		%		%
b.	Operating margin		%		%
c.	Net profit margin		%		%
d.	Accounts receivable turnover

2. Are operations improving or worsening?