Pinnacle Plus declared and paid a cash dividend of $7,600 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 $ 160,000 $ 139,000 Cost of Goods Sold 72,000 68,000 Gross Profit 88,000 71,000 Operating Expenses 46,000 41,000 Interest Expense 5,000 5,000 Income before Income Tax Expense 37,000 25,000 Income Tax Expense (30 ) 11,100 7,500 Net Income $ 25,900 $ 17,500 Balance Sheet Cash $ 82,550 $ 28,000 Accounts Receivable, Net 27,000 22,000 Inventory 35,000 48,000 Property and Equipment, Net 105,000 115,000 Total Assets $ 249,550 $ 213,000 Accounts Payable $ 52,000 $ 34,000 Income Tax Payable 1,250 1,000 Note Payable (long term) 50,000 50,000 Total Liabilities 103,250 85,000 Common Stock (par $10) 96,000 96,000 Retained Earnings 50,300 32,000 Total Liabilities and Stockholders Equity $ 249,550 $ 213,000 Required 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 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 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 Stockholders equity totaled $110,000 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 Net property and equipment totaled $120,000 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 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 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 After Pinnacle Plus released its current years financial statements, the companys stock was trading at $28 After the release of its previous years financial statements, the companys stock price was $25 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

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Pinnacle Plus declared and paid a cash dividend of $7,600 in the current year. Its comparative financial statements, prepared at December 31, reported the following

Pinnacle Plus declared and paid a cash dividend of $7,600 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	$	160,000	$	139,000
Cost of Goods Sold		72,000		68,000
Gross Profit		88,000		71,000
Operating Expenses		46,000		41,000
Interest Expense		5,000		5,000
Income before Income Tax Expense		37,000		25,000
Income Tax Expense (30%)		11,100		7,500
Net Income	$	25,900	$	17,500
Balance Sheet
Cash	$	82,550	$	28,000
Accounts Receivable, Net		27,000		22,000
Inventory		35,000		48,000
Property and Equipment, Net		105,000		115,000
Total Assets	$	249,550	$	213,000
Accounts Payable	$	52,000	$	34,000
Income Tax Payable		1,250		1,000
Note Payable (long-term)		50,000		50,000
Total Liabilities		103,250		85,000
Common Stock (par $10)		96,000		96,000
Retained Earnings		50,300		32,000
Total Liabilities and Stockholders Equity	$	249,550	$	213,000

Required:

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?
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?
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?
Stockholders equity totaled $110,000 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?
Net property and equipment totaled $120,000 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?
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?
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?
After Pinnacle Plus released its current years financial statements, the companys stock was trading at $28. After the release of its previous years financial statements, the companys stock price was $25 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?