Pharmacy Management Services, Inc. (PMSI), is a leading provider of products for workers' compensation insurance purposes. The company recently reported these figures.

\section*{Required}
Evaluate PMSI's operations during 1992 in comparison with 1991. Consider sales, gross margin, operating income, and net income. Track the gross margin percentage and inventory turnover in both years. PMSI's inventories at December 31, 1992, 1991, and 1990, were \$7,766,322, \(\$ 12,163,053\), and \(\$ 10,176,722\), respectively. In the annual report PMSI's management describes the restructuring charges in 1992 as a one-time event. How does this additional information affect your evaluation?

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PHARMACY MANAGEMENT SERVICES, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JULY 31, 1992 AND 1991 1992 1991 Sales Cost of sales $106,115,984 $81,685,715 76,424,328 60,981,847 Gross margin 29,691,656 20,703,868 Cost and expenses Selling, general and administrative 21,801,737 16,576,484 Depreciation and amortization 2,169,196 918,693 Restructuring charges Operating income (loss) Other items (summarized) Net income (loss) 7,096,774 31,067,707 17,495,177 (1,376,051) 3,208,691 (635,153) $ (2,011,204) (1,315,490) $ 1,893,201