Pinnacle Plus declared and paid a cash dividend of $7,200 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information:

	Current Year				Previous Year
Income Statement
Sales Revenue	$	140,000			$	123,000
Cost of Goods Sold		64,000				60,000
Gross Profit		76,000				63,000
Operating Expenses		42,000				37,800
Interest Expense		4,600				4,600
Income before Income Tax Expense		29,400				20,600
Income Tax Expense (30%)		8,820				6,180
Net Income	$	20,580			$	14,420
Balance Sheet
Cash	$	77,330			$	32,000
Accounts Receivable, Net		23,000				18,000
Inventory		31,000				44,000
Property and Equipment, Net		101,000				111,000
Total Assets	$	232,330			$	205,000
Accounts Payable	$	48,000			$	34,400
Income Tax Payable		1,150				800
Note Payable (long-term)		46,000				46,000
Total Liabilities		95,150				81,200
Common Stock (par $10)		93,600				93,600
Retained Earnings		43,580				30,200
Total Liabilities and Stockholders Equity	$	232,330			$	205,000

Required:

1. Compute the gross profit percentage in 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 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? 4. Stockholders equity totaled $106,000 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 $116,000 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 companys 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 Pinnacle Plus released its current years financial statements, the companys stock was trading at $24. After the release of its previous years financial statements, the companys stock price was $21 per share. Compute the P/E ratios for both years. Does it appear that investors have become more (or less) optimistic about Pinnacles future success?