Rodriguez Inc. operates a retail operation that purchases and sells home entertainment products. The company purchases all merchandise inventory on credit and uses a periodic inventory system. The Accounts Payable account is used for recording inventory purchases only; all other current liabilities are accrued in separate accounts. You are provided with the following selected information for the fiscal years 2009 through 2012, inclusive.

2009 2010 2011 2012
Income Statement Data
Sales revenue $55,000 (e) $47,000
Cost of goods sold (a) 13,800 14,300
Gross profit 38,300 35,200 (I)
Operating expenses 34,900 (f) 28,600
Net income (b) 2,500 (j)

Balance Sheet Data
Inventory $7,200 (c) $8,100 (k)
Accounts payable 3,200 3,600 2,500 (l)

Additional Information
Purchases of merchandise
Inventory on account $14,200 (g) 13,200
Cash payments to suppliers (d) (h) 13,600



Instructions:
1. Calculate the missing amounts
2. Sales declined over the 3-year fiscal period, 2010-2012. Does that mean that profitability necessarily also declined? Explain, computing the gross profit rate and the profit margin ratio for each fiscal year to help support your answer. (Round to one decimal place.)

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