$\backslash$table$[[\backslash$table$[[$Marco Company$],[$Balance Sheet$]],$December $31,\{$

$\backslash$table$[[$Year over year change$],[$Current vs Previous Year$]]\},$Common Sized$],[$Current Year,$1$ Year Ago,$2$ Years Ago,$\backslash$table$[[$Current Year$],[$$$]],\backslash$table$[[1$ Year Ago$],[\%]]],[$$$,\%],[$Assets$],[$Cash$,31,800,35,625,37,800,-3,825,-10\mathrm{.}74\%,6\mathrm{.}08\%,8\mathrm{.}01\%],[$Accounts receivable, net,$89,500,62,500,50,200,27,000,43\mathrm{.}20\%,17\mathrm{.}11\%,14\mathrm{.}04\%],[$Merchandise inventory,$112,500,82,500,54,000,30,000,36\mathrm{.}36\%,21\mathrm{.}51\%,18\mathrm{.}54\%],[$Prepaid expenses,$10,700,9,375,5,000,1,325,14\mathrm{.}13\%,2\mathrm{.}05\%,2\mathrm{.}11\%],[$Plant assets, net,$278,500,255,000,230,500,23,500,9\mathrm{.}22\%,53\mathrm{.}25\%,57\mathrm{.}30\%],[$Total assets,$523,000,445,000,377,500,78,000,17\mathrm{.}53\%,100\mathrm{.}00\%,100\mathrm{.}00\%],[$Liabilities and Equity$],[$Accounts payable,$129,900,75,250,51,250,54,650,72\mathrm{.}62\%,24\mathrm{.}84\%,16\mathrm{.}91\%],[$Long$-$term notes payable,$98,500,101,500,83,500,-3,000,-2\mathrm{.}96\%,18\mathrm{.}83\%,22\mathrm{.}81\%],[$Common stock, $$10$ par value,$163,500,163,500,163,500,0,0\mathrm{.}00\%,31\mathrm{.}26\%,36\mathrm{.}74\%],[$Retained earnings,$131,100,104,750,79,250,26,350,25\mathrm{.}16\%,25\mathrm{.}07\%,23\mathrm{.}54\%],[$Total liabilities and equity,$523,000,445,000,377,500,78,000,17\mathrm{.}53\%,100\mathrm{.}00\%,100\mathrm{.}00\%],[$Marco Company,December $31,,$Year over year change,Common Sized$],[$Income Statement,Current Year,$1$ Year Ago,,Current vs Previous Year,Current Year,$1$ Year Ago$],[,,,$$$,\%,$$$,\%],[$Sales$,$$$673,500,$$$532,000,,141,500,26\mathrm{.}60\%,100\mathrm{.}00\%,100\mathrm{.}00\%],[$Cost of goods sold,$$411,225,$$$345,500,,65,725,19\mathrm{.}02\%,61\mathrm{.}06\%,64\mathrm{.}94\%],[$Other operating expenses,$209,550,134,980,,74,570,55\mathrm{.}25\%,31\mathrm{.}11\%,25\mathrm{.}37\%],[$Interest expense,$12,100,13,300,,-1,200,-9\mathrm{.}02\%,1\mathrm{.}80\%,2\mathrm{.}50\%],[$Income tax expense,$9,525,8,845,,680,7\mathrm{.}69\%,1\mathrm{.}41\%,1\mathrm{.}66\%],[$Total costs and expenses,$642,400,502,625,,139,775,27\mathrm{.}81\%,95\mathrm{.}38\%,94\mathrm{.}48\%],[$Net income,$$31,100,$$$29,375,,1,725,5\mathrm{.}87\%,4\mathrm{.}62\%,5\mathrm{.}52\%]]$

As the Company's cost of goods sold grow, it is normal for the inventory to grow as well. Compare the year over year change in COGS to year over year change in Inventory and indicate whether change in inventory is in line with change in COGS.

$($a$)$ increase in Inv in unreasonably higher than increase in COGS

$($b$)$ increase in Inv is in line with increase in COGS

$($c$)$ Inv increased while COGS decreased

$($d$)$ Inv decreased while COGS increased

Which expense line item do you think was the main contributor to the change in net margin in #Q$8$ above $($Q$8$ Did the Company's Net Margin $($Net Income as a $\%$ of sales$)$ increase or decrease from $1$ year ago$)$

$($a$)$ Other operating expenses

$($b$)$ Interest expense

$($c$)$ income tax expense

Using the year over year $\%$ change in Sales and COGS, can you tell how the gross margin of the company has changed.

$($a$)$ Worsed

$($b$)$ Stayed the same

$($c$)$ Improved