lenox industrial ceramics manufactures and sells high performance ceramics used in jet engines, wind turbines, and other industrial applications. 2018-2020 summary financial data are shown below lennox industrial ceramics ($s in 000s except for per share data) consolidated income statement for year ending 12/31 2020 2019 2018 sales $118,255 $115,450 $112,500 cost of goods sold $55,400 $58,430 $61,875 gross profit $62,855 $57,020 $50,625 operating expenses $39,450 $36,250 $35,500 goodwill write off $12,175 operating profit $23,405 $8,595 $15,125 interest expense $1,350 $1,170 $725 income before tax $22,055 $7,425 $14,400 taxes $2,220 $955 $2,165 net income $19,835 $6,470 $12,235 ebitda $24,940 $21,930 $17,400 shares outstanding (millions) 7,620 8,600 10,600 earnings per share $2.60 $0.75 $1.15 dividends per share $1.55 $1.45 $0.75 share price (12/31) $47.55 $31.25 $20.65 balance sheet as of 12/31 2020 2019 2018 current assets $42,255 $41,750 $40,500 long term assets $50,755 $48,025 $58,200 total assets $93,010 $89,775 $98,700 current liabilties $18,950 $18,745 $20,325 long-term debt $42,535 $32,930 $21,365 equity $31,525 $38,100 $57,010 liabilities equity $93,010 $89,775 $98,700
Part A (i) According to Lenox's 10K, industrial ceramics prices declined an average of 3.0%/year for the last two years. What does Lenox's sales and gross profit margin for 2018 - 2020 suggest about Lenox's response
to declining prices? (ii) In addition to sales and gross profit what else affected Lenox's net income and net income margin?
