According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipment fell 3.6 percent between January and December 2018. Lets see whether these changes are reflected in the income statement of Computer Tycoon Incorporated for the year ended December 31, 2018.

	2018	2017
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 the change from 2017 to 2018 is the beginning of a sustained trend, is Computer Tycoon likely to earn more or less gross profit from each dollar of sales in 2019?
2. Compute the net profit margin for each year. Did Computer Tycoon do a better or worse job of controlling operating expenses in 2018 relative to 2017?
3. Computer Tycoon reported average net fixed assets of $54,200 in 2018 and $45,100 in 2017. Compute the fixed asset turnover ratios for both years. Did the company better utilize its investment in fixed assets to generate revenues in 2018 or 2017?
4. Computer Tycoon reported average stockholders equity of $54,000 in 2018 and $40,800 in 2017. 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 2018 than in 2017?