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. Let's see whether these changes are reflected in the income statement of Computer Tycoon Inc. for the year ended December 31, 2016, Sales Revenue Cost of Goods Sold Gross Profit Selling. General, and Administrative Expenses Interest Expense Income before Income Tax Expense Income Tax Expense Net Income 2016 $119, eee 69,500 49,500 37,900 2015 $148, See 79, 10e 69,489 40,800 57e 28.03e 6,990 $ 21,130 690 10.91 2.500 8.41e S 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 $56.100 in 2016 and $47.000 in 2015. Compute the fixed asset turnover Tatios for both years. Did the company better utilize its investment in fixed assets to generate revenues in 2016 or 2015? ute 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 $56,100 in 2016 and $47000 in 2015. Compute the fixed asset turn 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 $55.900 in 2016 and $42,700 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 1-a. Compute the gross profit percentage for each year. Round your answers to 1 decimal place.) 1-b. 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? Gross Profit Required 1 Required 2 Required 3 Required 4 1-a. Compute the gross profit percentage for each year. (Round your answers to 1 decimal pla 1-b. Assuming that the change from 2015 to 2016 is the beginning of a sustained trend, is Con more or less gross profit from each dollar of sales in 2017? 1-a 2015 2016 Gross Profit Percentage % % 1-5. Likely to eam in 2017? More Gross Profit Oless Gross Profit Required 2 > Required 1 Required 2 Required 3 Renuired 3-a. Computer Tycoon reported average net fixed assets of $56,100 in 2016 and $47,000 in 2015. Compute the fixed asset turnover ratios for both years. (Round your answers to 2 decimal place.) 3-b. Did the company better utilize its investment in fixed assets to generate revenues in 2016 or 2015? Fixed Asset Turnover 2015 2016 3-5. Investment better utilized? 2015 2015 Required 1 Required 2 Required 3 Required 4 4-a. Computer Tycoon reported average stockholders' equity of $55,900 in 2016 and $42,700 in 2015. The company has not issued preferred stock. Compute the return on equity ratios for both years. (Round your answers to 1 decimal place.) 4-b. Did the company generate greater retums for stockholders in 2016 than in 2015? Return on Equity (ROE) 2015 2016 4- Greater returns generated in 2016? O ONO
