Nova Incorporated declared and paid $4,800 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Current Previous Income Statement Sales revenue Cost of goods sold Gross profit $ 237,000 $ 270,000 146,000 136,000 124,000 101,000 Operating expenses 71,300 64,800 Interest expense 4,500 4,400 Income before income taxes 48,200 Income tax expense 31,800 4,800 14,460 Net income $ 33,740 $ 27,000 Balance Sheet Cash $ 8,940 $ 9,800 Accounts receivable (net) Inventory 37,000 32,000 58,000 53,000 56,000 Property and equipment (net) 63,000 Total assets $ 150,800 Current liabilities $ 166,940 $ 17,000 63,000 $ 31,600 63,000 Notes payable (long-term) Common stock (par $5) 40,800 40,800 Additional paid-in capital 8,600 6,800 Retained earnings 37,540 8,600 $ 166,940 $ 150,800 Total liabilities and stockholders' equity Required: 1. Compute the gross profit percentage for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 2. Compute the net profit margin for the current and previous years. Are the current-year results better, or worse, than those for the 2. Compute the net profit margin for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 3. Compute the earnings per share for the current and previous years. Are the current-year results better, or worse, than those for the previous year? TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding. Common Stock equals the par value per share times the number of shares. 4. Stockholders' equity totaled $40,800 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 5. Net property and equipment totaled $44,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 6. Compute the debt-to-assets ratios for the current and previous years. Is debt providing financing for a larger or smaller proportion of the company's asset growth? 7. Compute the times interest earned ratios for the current and previous years. Are the current-year results better, or worse, than those for the previous year? 8. After Nova released its current year's financial statements, the company's stock was trading at $48. After the release of its previous year's financial statements, the company's stock price was $36 per share. Compute the P/E ratios for both years. Does it appear that investors have become more (or less) optimistic about Nova's future success? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 7 Required 6 Required 8 4-a. Stockholders' equity totaled $40,800 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. (Round percentage values to 1 decimal place.) 4-b. Are the current-year results better, or worse, than those for the previous year? 4-a Current Year % 4-a Previous Year Worse 4.b. Current year return on equity ratio is < Prev 6 of 7 Next > 5 dcial statements, the company's stock was trading at $48. After the release of its previous year's financial statements, the company's stock price was $36 per share. Compute the P/E ratios for both years. Does it appear that Investors have become more (or less) optimistic about Nova's future success? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 6-a. Compute the debt-to-assets ratios for the current and previous years. (Round your answers to 2 decimal places.) 6-b. Is debt providing financing for a larger or smaller proportion of the company's asset growth? 6-a Current Year 6-a. Previous Year 6-b Current year debt-to-assets ratio is < Required 5 Required 7 > e more (or less) optimistic about Nova's future success? us foi boal yeals. Does it appear the Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 7-a. Compute the times interest earned ratios for the current and previous years. (Round your answers to 1 decimal place.) 7-b. Are the current-year results better, or worse, than those for the previous year? 7-a. Current Year 7-a. Previous Year 7-b. Current year times interest earned ratio is Better < Required 6 Required 8 > ces 101 Opamnistic about Nova's future success? 1999 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 8-a. After Nova released its current year's financial statements, the company's stock was trading at $48. After the release of its previous year's financial statements, the company's stock price was $36 per share. Compute the P/E ratios for both years. (Round your intermediate calculations to 2 decimal places and final answers to 1 decimal place.) 8-b. Does it appear that investors have become more (or less) optimistic about Nova's future success? Show less & 8-a. Current Year 10.7 99 8-a Previous Year 8-b. Current year P/E ratio is More Optimistic Required > < Required 7