the increase in gross profit as a percentage of net sales was primarily related to a decrease in material related costs partially offset by an increase in certain overhead costs . the level of gross margin is impacted by product mix , timing of the startup of new programs , facility utilization , pricing within the electronics industry and material costs , which can fluctuate significantly from quarter to quarter and year to year . operating income as a percentage of net sales for fiscal year 2017 was 2.0 percent compared to 2.1 percent for fiscal year 2016 . the decrease in operating income as a percentage of net sales was primarily due to an increase in selling , general and administrative expenses . this increase in sg & a expenses is primarily related to an increase in legal fees . net income for fiscal year 2017 was $ 5.6 million or $ 0.51 per diluted share , as compared to net income of $ 6.5 million or $ 0.58 per diluted share for fiscal year 2016 . the decrease in net income for fiscal year 2017 as compared to fiscal year 2016 was primarily driven by the decrease in net revenue as described above . 19 we maintain a strong balance sheet with a current ratio of 2.3 and a debt to equity ratio of 0.37 . total cash provided by operating activities as defined on our cash flow statement was $ 9.4 million during fiscal year 2017 . we maintain sufficient liquidity for our expected future operations . as of july 1 , 2017 , we had $ 18.3 million outstanding on our revolving line of credit with wells fargo bank , n.a . as a result , $ 26.3 million remained available to borrow as of july 1 , 2017 . we believe cash flow from operations , our borrowing capacity , our accounts receivable sale program , and equipment financing should provide adequate capital for planned growth over the long term . results of operations comparison of the fiscal year ended july 1 , 2017 with the fiscal year ended july 2 , 2016 the following table sets forth for the periods indicated certain items of the consolidated statements of income expressed as a percentage of net sales . the financial information and discussion below should be read in conjunction with the consolidated financial statements and notes contained in this annual report . replace_table_token_5_th net sales the decrease in net sales of $ 17.2 million from prior year was primarily driven by a decrease in net sales from the former longstanding customer which has been discussed in prior quarters , partially offset by an increase in new program wins . the following table shows the revenue by industry sectors as a percentage of revenue for fiscal years 2017 and 2016 : replace_table_token_6_th we provide services to customers in a number of industries and produce a variety of products for our customers in each industry . key tronic does not target any particular industry , but rather seeks to find programs that strategically fit our vertical manufacturing capabilities . as we continue to diversify our customer base and win new customers , we will continue to see a change in the industry concentrations of our revenue . sales to foreign locations represented 22.6 percent and 28.3 percent of our total net sales in fiscal years 2017 and 2016 , respectively . 20 cost of sales total cost of sales as a percentage of net sales was 91.8 percent and 92.0 percent in fiscal years 2017 and 2016 , respectively . total cost of materials as a percentage of net sales was approximately 61.7 percent and 63.9 percent in fiscal years 2017 and 2016 , respectively . the change from year-to-year is primarily a result of improved pricing of certain raw materials as well as a more favorable product mix . production and support costs as a percentage of net sales were 30.1 percent and 28.1 percent in fiscal years 2017 and 2016 , respectively . the increase in fiscal year 2017 is primarily related absorption increasing as a percentage of sales during the fiscal year . we provide a reserve for obsolete and non-saleable inventories based on specific identification of inventory against current demand and recent usage . we also consider our customers ' ability to pay for inventory whether or not there is a lead-time assurance agreement for a specific program . the amounts charged to expense for these inventories were approximately $ 0.5 million and $ 0.8 million in fiscal years 2017 and 2016 , respectively . we provide warranties on certain products we sell and estimate warranty costs based on historical experience and anticipated product returns . warranty expense is related to workmanship claims on keyboards and ems products . the amounts charged to expense are determined based on an estimate of warranty exposure . the net warranty expense was approximately $ 68,000 and $ 95,000 in fiscal years 2017 and 2016 , respectively . gross profit gross profit as a percentage of net sales was 8.2 percent and 8.0 percent in fiscal years 2017 , and 2016 , respectively . the 0.2 percentage point increase in gross profit as a percentage of net sales during fiscal year 2017 as compared to fiscal year 2016 is primarily related to a 1.7 percentage point decrease in material related costs partially offset by a 1.5 percentage point increase in certain overhead costs . this reflects an increase in gross margin percentage year-over-year as the unprofitable manufacturing facility was closed and trimming non-profitable programs . story_separator_special_tag to determine the fair value of stock based awards on the date of grant we use the black-scholes option-pricing model . inherent in this model are assumptions related to expected stock price volatility , option life , risk-free interest rate and dividend yield . the risk-free interest rate is a less-subjective assumption as it is based on factual data derived from public sources . we use a dividend yield of zero as we have never paid cash dividends and have no intention to pay cash dividends in the foreseeable future . the expected stock price volatility and option life assumptions require a greater level of judgment . our expected stock-price volatility assumption is based upon the historical volatility of our stock which is obtained from public data sources . the expected life represents the weighted average period of time that share-based awards are expected to be outstanding , giving consideration to vesting schedules and historical exercise patterns . we determine the expected life assumption based upon the exercise and post-vesting behavior that has been exhibited historically , adjusted for specific factors that may influence future exercise patterns . if expected volatility or expected life were to increase , that would result in an increase in the fair value of our stock options which would result in higher compensation charges , while a decrease in volatility or the expected life would result in a lower fair value of our stock option awards resulting in lower compensation charges . we estimate forfeitures for all of our awards based upon historical experience of stock-based pre-vesting forfeitures . we believe that our estimates are based upon outcomes that are reasonably likely to occur . if actual forfeitures are higher than our estimates it would result in lower compensation expense and to the extent the actual forfeitures are lower than our estimate we would record higher compensation expense . impairment of long-lived assets long-lived assets , such as property , plant , and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . the recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset . if the carrying amount of an asset exceeds its estimated undiscounted future cash flows , an impairment charge would be recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset . derivatives and hedging activity derivatives are recognized on the balance sheet at their estimated fair value . on the date a derivative contract is entered into , the company designates the derivative as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability ( a “ cash flow ” hedge ) . the company does not enter into derivatives for speculative purposes . changes in the fair value of a derivative that qualifies as a cash flow hedge are recorded in “ accumulated other comprehensive income , ” until earnings are affected by the variability of cash flows . see note 11 of the company 's consolidated financial statements for additional information . long-term incentive compensation accrual long-term incentive compensation is recognized as expense ratably over the requisite service period of the award which is generally three years . the board of directors approve target performance measures for the three year period for each of the company 's officers and non-employee directors . performance measures are based on a combination of sales growth targets and return on invested capital targets . no cash awards will be made to participants if actual company performance does not exceed the minimum target performance measures . the calculation used to determine the necessary accrual uses a combination of actual results and projected results . we believe that our estimates are based upon outcomes that are reasonably likely to occur . these estimates and assumptions are based on historical results as well as future expectations . actual results could vary from our estimates and assumptions . 28 impairment of goodwill in accordance with asc 350 , goodwill and other intangible assets , goodwill is not amortized but is required to be reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value . the company is permitted the option to first assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the fair value of any reporting unit is less than its corresponding carrying value . if , after assessing the totality of events and circumstances , the company concludes that it is not more likely than not that the fair value of any reporting unit is less than its corresponding carrying value then the company is not required to take further action . however , if the company concludes otherwise , then it is required to perform a quantitative impairment test , including computing the fair value of the reporting unit and comparing that value to its carrying value . the company utilizes a weighting of the income approach and a market approach in the impairment test . we also consider valuation factors including the company 's market capitalization , future discounted cash flows and an estimated control premium based upon a review of comparable market transactions . our consideration of discounted future cashflows included assumptions regarding growth rates and margins based on our historical trends . in addition , we applied a market discount rate calculated based upon an analysis of companies similar in size . if our future cash flows do not meet our projections or there is an event that impacts our market capitalization , the assumptions used in our goodwill analysis could be negatively impacted . the estimated

capital resources and liquidity operating cash flow net cash provided by operating activities for fiscal year 2017 was $ 9.4 million compared to net cash provided by operating activities of $ 4.6 million and $ 7.7 million in fiscal years 2016 and 2015 , respectively . the $ 9.4 million of net cash provided by operating activities during fiscal year 2017 is primarily related to $ 5.6 million of net income , $ 7.2 million of depreciation and amortization and a $ 4.9 million decrease in inventory , partially offset by a $ 3.5 million increase in accounts receivable and a $ 5.9 million decrease in accounts payable . the $ 4.6 million of net cash provided by operating activities during fiscal year 2016 was primarily due to $ 6.5 million of net income , $ 6.2 million of depreciation and amortization and an $ 11.1 million decrease in accounts receivable offset by a $ 16.2 million increase in inventory and a $ 2.6 million decrease in accounts payable . the $ 7.7 million of cash provided by operating activities during fiscal year 2015 was primarily due to $ 4.3 million of net income , $ 5.9 million of depreciation and amortization and an $ 18.0 million increase in accounts payable partially offset by a $ 14.7 million increase in inventory , a $ 2.1 million increase in accounts receivable and a $ 4.2 million increase in other assets . accounts receivable fluctuates based on the timing of shipments , terms offered and collections . in addition , accounts receivable will fluctuate based upon the amount of accounts receivable sold under our trade accounts receivable purchase program . during fiscal years 2017 , 2016 and 2015 , we factored receivables of $ 86.5 million , $ 78.0 million and $ 12.1 million , respectively , from accounts receivable sold to financial institutions , which are not included on our consolidated balance sheets . we purchase inventory based on customer forecasts and orders , and when those forecasts and orders change , the amount of inventory may also fluctuate .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```capital resources and liquidity operating cash flow net cash provided by operating activities for fiscal year 2017 was $ 9.4 million compared to net cash provided by operating activities of $ 4.6 million and $ 7.7 million in fiscal years 2016 and 2015 , respectively . the $ 9.4 million of net cash provided by operating activities during fiscal year 2017 is primarily related to $ 5.6 million of net income , $ 7.2 million of depreciation and amortization and a $ 4.9 million decrease in inventory , partially offset by a $ 3.5 million increase in accounts receivable and a $ 5.9 million decrease in accounts payable . the $ 4.6 million of net cash provided by operating activities during fiscal year 2016 was primarily due to $ 6.5 million of net income , $ 6.2 million of depreciation and amortization and an $ 11.1 million decrease in accounts receivable offset by a $ 16.2 million increase in inventory and a $ 2.6 million decrease in accounts payable . the $ 7.7 million of cash provided by operating activities during fiscal year 2015 was primarily due to $ 4.3 million of net income , $ 5.9 million of depreciation and amortization and an $ 18.0 million increase in accounts payable partially offset by a $ 14.7 million increase in inventory , a $ 2.1 million increase in accounts receivable and a $ 4.2 million increase in other assets . accounts receivable fluctuates based on the timing of shipments , terms offered and collections . in addition , accounts receivable will fluctuate based upon the amount of accounts receivable sold under our trade accounts receivable purchase program . during fiscal years 2017 , 2016 and 2015 , we factored receivables of $ 86.5 million , $ 78.0 million and $ 12.1 million , respectively , from accounts receivable sold to financial institutions , which are not included on our consolidated balance sheets . we purchase inventory based on customer forecasts and orders , and when those forecasts and orders change , the amount of inventory may also fluctuate .
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 Suspicious Activity Report : the increase in gross profit as a percentage of net sales was primarily related to a decrease in material related costs partially offset by an increase in certain overhead costs . the level of gross margin is impacted by product mix , timing of the startup of new programs , facility utilization , pricing within the electronics industry and material costs , which can fluctuate significantly from quarter to quarter and year to year . operating income as a percentage of net sales for fiscal year 2017 was 2.0 percent compared to 2.1 percent for fiscal year 2016 . the decrease in operating income as a percentage of net sales was primarily due to an increase in selling , general and administrative expenses . this increase in sg & a expenses is primarily related to an increase in legal fees . net income for fiscal year 2017 was $ 5.6 million or $ 0.51 per diluted share , as compared to net income of $ 6.5 million or $ 0.58 per diluted share for fiscal year 2016 . the decrease in net income for fiscal year 2017 as compared to fiscal year 2016 was primarily driven by the decrease in net revenue as described above . 19 we maintain a strong balance sheet with a current ratio of 2.3 and a debt to equity ratio of 0.37 . total cash provided by operating activities as defined on our cash flow statement was $ 9.4 million during fiscal year 2017 . we maintain sufficient liquidity for our expected future operations . as of july 1 , 2017 , we had $ 18.3 million outstanding on our revolving line of credit with wells fargo bank , n.a . as a result , $ 26.3 million remained available to borrow as of july 1 , 2017 . we believe cash flow from operations , our borrowing capacity , our accounts receivable sale program , and equipment financing should provide adequate capital for planned growth over the long term . results of operations comparison of the fiscal year ended july 1 , 2017 with the fiscal year ended july 2 , 2016 the following table sets forth for the periods indicated certain items of the consolidated statements of income expressed as a percentage of net sales . the financial information and discussion below should be read in conjunction with the consolidated financial statements and notes contained in this annual report . replace_table_token_5_th net sales the decrease in net sales of $ 17.2 million from prior year was primarily driven by a decrease in net sales from the former longstanding customer which has been discussed in prior quarters , partially offset by an increase in new program wins . the following table shows the revenue by industry sectors as a percentage of revenue for fiscal years 2017 and 2016 : replace_table_token_6_th we provide services to customers in a number of industries and produce a variety of products for our customers in each industry . key tronic does not target any particular industry , but rather seeks to find programs that strategically fit our vertical manufacturing capabilities . as we continue to diversify our customer base and win new customers , we will continue to see a change in the industry concentrations of our revenue . sales to foreign locations represented 22.6 percent and 28.3 percent of our total net sales in fiscal years 2017 and 2016 , respectively . 20 cost of sales total cost of sales as a percentage of net sales was 91.8 percent and 92.0 percent in fiscal years 2017 and 2016 , respectively . total cost of materials as a percentage of net sales was approximately 61.7 percent and 63.9 percent in fiscal years 2017 and 2016 , respectively . the change from year-to-year is primarily a result of improved pricing of certain raw materials as well as a more favorable product mix . production and support costs as a percentage of net sales were 30.1 percent and 28.1 percent in fiscal years 2017 and 2016 , respectively . the increase in fiscal year 2017 is primarily related absorption increasing as a percentage of sales during the fiscal year . we provide a reserve for obsolete and non-saleable inventories based on specific identification of inventory against current demand and recent usage . we also consider our customers ' ability to pay for inventory whether or not there is a lead-time assurance agreement for a specific program . the amounts charged to expense for these inventories were approximately $ 0.5 million and $ 0.8 million in fiscal years 2017 and 2016 , respectively . we provide warranties on certain products we sell and estimate warranty costs based on historical experience and anticipated product returns . warranty expense is related to workmanship claims on keyboards and ems products . the amounts charged to expense are determined based on an estimate of warranty exposure . the net warranty expense was approximately $ 68,000 and $ 95,000 in fiscal years 2017 and 2016 , respectively . gross profit gross profit as a percentage of net sales was 8.2 percent and 8.0 percent in fiscal years 2017 , and 2016 , respectively . the 0.2 percentage point increase in gross profit as a percentage of net sales during fiscal year 2017 as compared to fiscal year 2016 is primarily related to a 1.7 percentage point decrease in material related costs partially offset by a 1.5 percentage point increase in certain overhead costs . this reflects an increase in gross margin percentage year-over-year as the unprofitable manufacturing facility was closed and trimming non-profitable programs . story_separator_special_tag to determine the fair value of stock based awards on the date of grant we use the black-scholes option-pricing model . inherent in this model are assumptions related to expected stock price volatility , option life , risk-free interest rate and dividend yield . the risk-free interest rate is a less-subjective assumption as it is based on factual data derived from public sources . we use a dividend yield of zero as we have never paid cash dividends and have no intention to pay cash dividends in the foreseeable future . the expected stock price volatility and option life assumptions require a greater level of judgment . our expected stock-price volatility assumption is based upon the historical volatility of our stock which is obtained from public data sources . the expected life represents the weighted average period of time that share-based awards are expected to be outstanding , giving consideration to vesting schedules and historical exercise patterns . we determine the expected life assumption based upon the exercise and post-vesting behavior that has been exhibited historically , adjusted for specific factors that may influence future exercise patterns . if expected volatility or expected life were to increase , that would result in an increase in the fair value of our stock options which would result in higher compensation charges , while a decrease in volatility or the expected life would result in a lower fair value of our stock option awards resulting in lower compensation charges . we estimate forfeitures for all of our awards based upon historical experience of stock-based pre-vesting forfeitures . we believe that our estimates are based upon outcomes that are reasonably likely to occur . if actual forfeitures are higher than our estimates it would result in lower compensation expense and to the extent the actual forfeitures are lower than our estimate we would record higher compensation expense . impairment of long-lived assets long-lived assets , such as property , plant , and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . the recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset . if the carrying amount of an asset exceeds its estimated undiscounted future cash flows , an impairment charge would be recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset . derivatives and hedging activity derivatives are recognized on the balance sheet at their estimated fair value . on the date a derivative contract is entered into , the company designates the derivative as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability ( a “ cash flow ” hedge ) . the company does not enter into derivatives for speculative purposes . changes in the fair value of a derivative that qualifies as a cash flow hedge are recorded in “ accumulated other comprehensive income , ” until earnings are affected by the variability of cash flows . see note 11 of the company 's consolidated financial statements for additional information . long-term incentive compensation accrual long-term incentive compensation is recognized as expense ratably over the requisite service period of the award which is generally three years . the board of directors approve target performance measures for the three year period for each of the company 's officers and non-employee directors . performance measures are based on a combination of sales growth targets and return on invested capital targets . no cash awards will be made to participants if actual company performance does not exceed the minimum target performance measures . the calculation used to determine the necessary accrual uses a combination of actual results and projected results . we believe that our estimates are based upon outcomes that are reasonably likely to occur . these estimates and assumptions are based on historical results as well as future expectations . actual results could vary from our estimates and assumptions . 28 impairment of goodwill in accordance with asc 350 , goodwill and other intangible assets , goodwill is not amortized but is required to be reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value . the company is permitted the option to first assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the fair value of any reporting unit is less than its corresponding carrying value . if , after assessing the totality of events and circumstances , the company concludes that it is not more likely than not that the fair value of any reporting unit is less than its corresponding carrying value then the company is not required to take further action . however , if the company concludes otherwise , then it is required to perform a quantitative impairment test , including computing the fair value of the reporting unit and comparing that value to its carrying value . the company utilizes a weighting of the income approach and a market approach in the impairment test . we also consider valuation factors including the company 's market capitalization , future discounted cash flows and an estimated control premium based upon a review of comparable market transactions . our consideration of discounted future cashflows included assumptions regarding growth rates and margins based on our historical trends . in addition , we applied a market discount rate calculated based upon an analysis of companies similar in size . if our future cash flows do not meet our projections or there is an event that impacts our market capitalization , the assumptions used in our goodwill analysis could be negatively impacted . the estimated

