Ch The comparative financial statements prepared at December 31, 2017, for Pinnacle Plus showed the following summarized data: Income Statement Sales Revenue* Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) Net Income 2017 2016 $120,000 $109,000 56,000 52,000 64,000 57,000 39,000 36,000 5,000 5,000 20,000 6,000 16,000 4,800 $ 14,000 $ 11,200 Balance Sheet Cash Accounts Receivable, Net Inventory Property and equipment, Net Total Assets Accounts Payable Income Tax Payable Note Payable, Long-Term Total Liabilities $ 66,400 $ 14,300 47,000 30,000 37,000 48,000 115,000 125,000 $258,400 $224,300 $ 77,400 $ 50,200 1,100 50,000 600 50,000 128,500 100,800 Total Liabilities Contributed Capital (9,500 shares) Retained Earningst 128,500 100,800 95,000 95,000 34,900 28,500 Total Liabilities and Shareholders' Equity $258,400 $224,300 One-half of all sales are on credit. During 2017, cash dividends amounting to $7,600 were declared and paid. Required: 1-a. Compute the gross profit percentage in 2017 and 2016. (Round your answers to 1 decimal place.) 2017 2016 Gross Profit Percentage % % 1-b. Is the trend going in the right direction? O No O Yes 2-a. Compute the net profit margin for 2017 and 2016. (Round your answers to 1 decimal place.) 2017 2016 Net Profit Margin % % 2-b. Is the trend going in the right direction? O Yes O No 3-a. Compute the earnings per share for 2017 and 2016. (Round your answers to 2 decimal places.) Earnings per Share 2017 2016 3-b. Does the trend look good or bad? O Bad O Good 4-a. Shareholders' equity totalled $100,000 at the end of 2015. Compute the return on equity (ROE) ratios for 2017 and 2016. (Round your answers to 1 decimal place.) Return on 2017 2016 Equity % % 4-b. Is the trend going in the right direction? O No Yes 5-a. Net property and equipment totalled $130,000 at the end of 2015. Compute the fixed asset turnover ratios for 2017 and 2016. (Round your answers to 2 decimal places.) 2017 2016 Fixed Asset Turnover 5-b. Is the trend going in the right direction? O Yes O No 6-a. Compute the debt-to-assets ratios for 2017 and 2016. (Round your answers to 2 decimal places.) 2017 2016 Debt-to- Assets 6-b. Is debt providing financing for a larger or smaller proportion of the company's asset growth? O Smaller proportion O Larger proportion 7-a. Compute the times interest earned ratios for 2017 and 2016. (Round your answers to 1 decimal place.) Times Interest 2017 2016 Earned times times 7-b. Does the outcome of ratio in 2017 appears to be good or bad for the company? O Good O Bad 8-a. After Pinnacle Plus released its 2017 financial statements, the company's shares were trading at $45.70. After the release of its 2016 financial statements, the company's share price was $39.00 per share. Compute the P/E ratios for both years. (Round intermediate calculations to 2 decimal places and final answers to 1 decimal place.) 2017 2016 Price/ Earnings 8-b. Does it appear that investors have become more (or less) optimistic about Pinnacle's future success? O Less optimistic O More optimistic