Wilson Distributors is a provider of automotive products. The company recently reported the following:

Required
Evaluate Wilson Distributors' operations during 2017 in comparison with 2016. Consider sales, gross margin, operating income, and net income. Track the gross margin percentage and inventory turnover in both years. Wilson Distributors' inventories at December 31, 2017, 2016, and 2015, were $92,000, $145,000, and $122,000, respectively. In the annual report, management describes the restructuring charges in 2017-the costs of downsizing the company-as a one-time event. How does this additional information affect your evaluation?

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WILSON DISTRIBUTORS Consolidated Statements of Operations (Adapted) For the Years Ended July 31, 2017 and 2016 2017 $1,320,000 2016 Sales Cost of sales Gross margin Cost and expenses: $984,000 8000752,000 340,000 Selling, general, and administrative Amortization 264,000 34,000 84,000 204,000 21,000 Operating income (loss) Other items (summarized) Net income (loss) 382000225,000 7,000 (16,000) (42,000) (7,000) 49,000