Selected information from Bigg Company€™s financial statements follows.

Required:
1. Calculate the following ratios for 2009 and 2010:
a. Gross profit ratio
b. Operating margin ratio
c. Net profit margin ratio
d. Accounts receivable turnover
2. For each of the first three ratios listed above, provide a plausible explanation for any differences that exist (e.g., Why is the net profit margin higher or lower than it was the previous year, etc.).
3. Explain what each ratio attempts to measure. Make an assessment about Bigg Company based upon the ratios you have calculated. Are operations improving orworsening?

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Fiscal Year Ended De cember 31 2009 in thousands) 2010 2008 Gross sales $1,937,021 $2,004,719 4,811 $1,835,987 4,406 Less: Sales discounts 4,649 2,324 619,847 595,226 (5,720) Less: Sales returns and 2,406 $1,997,502 621,463 $1,376,039 577,369 $ 798,670 15,973 $ 814,643 allowances Net sales Cost of goods sold Gross profit Operating expenses Operating income Other income (expenses) Net income $1,930,048 $1,310,201 $ 714,975 $1,829,378 660,955 $1,168,423 583,555 S 584,868 (8,773) S 576,095 $ 709,255 At December 31 2009 (in thousands) $195,427 2010 2008 $201,290 $182,642 Accou Less: Allowance for doubtful nts receivable 2,516 $198,774 accounts 2,736 Net accounts receivable $192,691