According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipment fell 3.8 percent between January and December 2016. Lets see whether these changes are reflected in the income statement of Computer Tycoon Inc. for the year ended December 31, 2016.

	2016				2015
Sales Revenue		$	100,000			$	120,000
Cost of Goods Sold			60,000				71,500
Gross Profit			40,000				48,500
Selling, General, and Administrative Expenses			36,000				37,000
Interest Expense			500				475
Income before Income Tax Expense			3,500				11,025
Income Tax Expense			1,000				5,000
Net Income		$	2,500			$	6,025

Required: 1. Compute the gross profit percentage for each year. Assuming that the change from 2015 to 2016 is the beginning of a sustained trend, is Computer Tycoon likely to earn more or less gross profit from each dollar of sales in 2017? 2. Compute the net profit margin for each year. Given your calculations here and in requirement 1, explain whether Computer Tycoon did a better or worse job of controlling operating expenses in 2016 relative to 2015. 3. Computer Tycoon reported average net fixed assets of $54,200 in 2016 and $45,100 in 2015. Compute the fixed asset turnover ratios for both years. Did the company better utilize its investment in fixed assets to generate revenues in 2016 or 2015? 4. Computer Tycoon reported average stockholders equity of $54,000 in 2016 and $40,800 in 2015. The company has not issued preferred stock. Compute the return on equity ratios for both years. Did the company generate greater returns for stockholders in 2016 than in 2015?