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Question: A Company is trying to determine why their overall profit margin is low. Considering the information presented below, where within the multi-step income statement would you recommend that management look to potentially identify and solve the problem and what types of expense items could be a concern for this company

Company B 2016 2015 2014 2013 2012 Ind. Average

Gross Profit Margin 51.0% 51.0% 49.0% 50.0% 51.0% 50.0%

Oper Profit Margin 12.0% 12.0% 13.0% 12.0% 11.0% 12.0%

Net Profit Margin 3.0% 4.0% 4.0% 5.0% 5.0% 6.0%

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