Comparative Income Statements for Jameson Inc Required
the President and Management Believe That the Company Performed

Comparative income statements for Jameson Inc.are as follows:

$\begin{array}{|l|r|r|}\hline &{\mathbf{2 0 1 8}} &{\mathbf{2 0 1 7}} \\\hline \text { Sales } & \$ 2,000,000 & \$ 600,000 \\\hline \text { Cost of sales } & 800,000 & \underline{400,000} \\\hline \text { Gross profit } & \$ 1,200,000 & \$ 200,000 \\\hline \text { Operating expenses } & 520,000 & \underline{120,000} \\\hline \text { Operating income } & \$ 680,000 & \$ 80,000 \\\hline \text { Loss on sale of subsidiary } & (800,000) & 0 \\\hline \text { Net income (loss) } & \$(120,000) & \$ 80,000 \\\hline\end{array}$ Required
The president and management believe that the company performed better in 2018 than it did in 2017.Write the president's letter to be included in the 2018 annual report.Explain why the company is financially sound and why shareholders should not be alarmed by the $120,000 loss in a year when gross profit increased significantly.