Please help with explanation

Williams Company is a manufacturer of auto parts having the following financial statements for 2015-2016. Balance Sheet December 31, 2016 2016 Cash 276,000 166,000 Accounts receivable Inventory 401,000 843,000 Total current assets 1,800,000 Long-lived assets Total assets 2,643,000 Current liabilities 376,000 Long-term debt 916,000 Shareholder equity 1,351,000 Total debt and equity 2,643,000 Income Statement For the years ended December 31, 2016 2016 3,660,000 Sales Cost of sales 2,820,000 Gross margin 840,000 516,000 Operating expenses Operating income 324,000 Taxes 113,400 210,600 Net income