Wilson Distributors is a provider of motorcycle parts. The company recently reported the following:

RequiredEvaluate Wilson Distributors’ operations during 2023 in comparison with 2022. Consider sales, gross margin, operating income, and net income. Compare the gross margin percentage and inventory turnover in both years. Wilson Distributors’ inventories at December 31, 2023, 2022, and 2021, were $92,000, $145,000, and $122,000, respectively. In the annual report, management describes the restructuring charges in 2023—the costs of downsizing the company—as a one-time event. How does this additional information affect your evaluation?

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Sales Cost of sales Gross margin WILSON DISTRIBUTORS Consolidated Statements of Operations For the Years Ended July 31, 2023 and 2022 Expenses Selling, general, and administrative Amortization Restructuring charges Total expenses Operating income (loss) Other items (summarized) Net income (loss) 2023 $1,320,000 980,000 340,000 264,000 34,000 84,000 382,000 (42,000) (7,000) $ (49,000) 2022 $984,000 752,000 232,000 204,000 21,000 225,000 7,000 (16,000) $ (9,000)