Cheri's Beauty Products Ltd. reported the figures below at December 31, 2014, 2013, and 2012. The business has declared bankruptcy. You have been asked to review the business and explain why it failed.

Requirement
Evaluate the trend of Cheri's Beauty Products' results of operations during 2012 through 2014. Consider the trends of sales, gross profit, and net income. Track the gross profit percentage (to three decimal places) and the rate of inventory turnover (to one decimal place) in each year-2012, 2013, and 2014. Also, discuss the role that selling expenses must have played in Cheri's Beauty Products' difficulties.

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Cheri's Beauty Products Ltd. Statement of Income For the Years Ended December 31, 2014, 2013, and 2012 Thousands Sales Cost of sales Selling expenses Other expenses Net income (net loss) Additional data: 2014 41.0 32.7 8.0 0.4 2013 $39.5 30.9 7.2 1.0 $ 0.4 2012 $37.1 28.9 6.8 0.8 0.6 Ending inventory 8.6 7.7