I Need help with this auditing short essay questions

Your comparison of the gross margin percentage for Jones Drugs for the years 2013 through 2016 indicates a significant decline. This is shown by the following information:

	2016	2015	2014	2013
Sales (thousands)	$14,211	$12,916	$11,462	$10,351
CGS (thousands)	9,233	8,266	7,313	6,573
Gross margin	$4,988	$4,650	$4,149	$3,788
Percent	35.1	36.0	36.2	36.5

A discussion with Mary Adams, the Controller, brings to light two possible explanations. She informs you that the industry gross profit percentage in the retail drug industry declined fairly steadily for 3 years, which accounts for part of the decline. A second factor was the declining percentage of the total volume resulting from the pharmacy part of the business. The pharmacy sales represent the most profitable portion of the business, yet the competition from discount drugstores prevents it from expanding as fast as the nondrug items such as magazines, candy, and many other items sold. Adams feels strongly that these two factors are the cause of the decline. The following additional information is obtained from independent sources and the clients records as a means of investigating the controllers explanations:

	Jones Drugs ($ in thousands)				Industry Gross Profit Percent for
			Drug Cost of	Nondrug Cost of	Retailers of Drugs and Related
	Drug Sales	Nondrug Sales	Goods Sold	Goods Sold	Products
2016	$5,126	$9,085	$3,045	$6,178	32.7
2015	5,051	7,865	2,919	5,347	32.9
2014	4,821	6,641	2,791	4,522	33.0
2013	4,619	5,732	2,665	3,908	33.2

Evaluate the explanation provided by Adams. Please show calculations to support your conclusions. Which specific aspects of the clients financial information require further investigation in this audit?