Income Statements And Profitability Ratios

Income StatementSalesCost of goods sold Gross ProfitOperating Expenses Selling expenses Advertising expense Commission expense Administrative expenses Office supplies expens Office equipment expense Total Operating ExpensesOperating IncomeNon-operating or other revenues (Expense) Interest revenue Interest ExpenseTotal Non-operating or other revenues (Expense) Net IncomeStatement of retained earningsBeginning retained earningsAdd: Net IncomeLess: Dividends declaredEnding retained earnings Gain on sale of Equipment Loss from FireTax expenseJackson, IncFor the year ended December 31, 2012Income before taxRatiosGross Profit Margin = Gross Profit / Net Sales = 134,700 / 297,000Operating Income Margin = Operating Income / Net Sales = 79,800 / 297,000Net Profit Margin = Net Income / Net Sales = 51,100 / 297,000 Jackson, 2011 Jackson, 2010 Competitor, 2012 Write a paragraph analyzing each of the profitability ratios for Jackson, Inc. given the following information from previous years and competitors.Gross profit margin Operating income margin Net profit marginJackson, 2012From the above data, we can see that Jackson Inc. has decreased the gross margin from 48.87% to 45.35%. Althought the competitiors gross margin is only 43.22%, still Jackson Inc. needs to get the reasons for the decrease in gross margin and imrove it. Operating income margin has been stable at 25-26% in all the three years. But this