Use the data given in PB13-1 for Tiger Audio.

Required:

1. Compute the gross profit percentage in 2017 and 2016. Is the trend going in the right direction?

2. Compute the net profit margin for 2017 and 2016. Is the trend going in the right direction?

3. Compute the earnings per share for 2017 and 2016. Does the trend look good or bad? Explain.

4. Shareholders? equity totalled $65,000 at the end of 2015. Compute the return on equity ratios for 2017 and 2016. Is the trend going in the right direction?

5. Net property and equipment totalled $115,000 at the end of 2015. Compute the fixed asset turnover ratios for 2017 and 2016. Is the trend going in the right direction?

6. Compute the debt-to-assets ratios for 2017 and 2016. Is debt providing financing for a larger or smaller proportion of the company?s asset growth? Explain.

7. Compute the times interest earned ratios for 2017 and 2016. Do they look good or bad? Explain.

8. After Tiger released its 2017 financial statements, the company?s shares were trading at $17. After the release of its 2016 financial statements, the company?s share price was $12 per share. Compute the P/E ratios for both years. Does it appear that investors have become more or less optimistic about Tiger?s future success?

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Increase (Decrease) 2017 over 2016 Amount Percentage 2017 2016 Income Statement $222,000 $185,000 Sales Revenue Cost of Goods Sold 127,650 111,000 Gross Profit 94,350 74,000 Operating Expenses 39,600 33,730 3,270 Interest Expense 4,000 37,000 Income before Income Tax Expense 50,750 11,100 Income Tax Expense (30%) 15,225 $ 35,525 $ 25,900 Net Income Balance Sheet $ 40,000 $ 38,000 Cash Accounts Receivable, Net 18,500 16,000 Inventory 25,000 22,000 Property and Equipment, Net 127,000 119,000 $210,500 $195,000 Total Assets $ 27,000 $ 25,000 Accounts Payable 2,800 Income Tax Payable 3,000 Note Payable, Long-Term 92,200 75,500 Total Liabilities 105,500 120,000 25,000 Contributed Capital (25,000 shares outstanding) 25,000 Retained Earnings 80,000 50,000 $210,500 $195,000 Total Liabilities and Shareholders' Equity