Use the following information to analyze the BJ Company. Calculate any profit measures deemed necessary in order to discuss the profitability of the company (Cost of goods sold percentage, Gross profit margin, General & administrative expense/Net sales, Operating profit margin, Effective tax rate, Net profit margin). Comment the results.

BJ Company

Income Statements

For the Years Ended Dec. 31, 2009 and 2008

2009 2008

Net sales $174,000 $167,000

COGS 114,000 115,000

Gross profit $ 60,000 $ 52,000

General and administrative expenses 54,000 46,000

Operating profit $ 6,000 $ 6,000

Interest expense (1,000) (1,000)

Earnings before taxes $ 5,000 $ 5,000

Income taxes 2,000 2,000

Net income $ 3,000 $ 3,000