Pinnacle Plus declared and paid a cash dividend of $7,700 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	$	165,000			$	143,000
Cost of Goods Sold		74,000				70,000
Gross Profit		91,000				73,000
Operating Expenses		47,000				41,800
Interest Expense		5,100				5,100
Income before Income Tax Expense		38,900				26,100
Income Tax Expense (30%)		11,670				7,830
Net Income	$	27,230			$	18,270
Balance Sheet
Cash	$	83,855			$	27,000
Accounts Receivable, Net		28,000				23,000
Inventory		36,000				49,000
Property and Equipment, Net		106,000				116,000
Total Assets	$	253,855			$	215,000
Accounts Payable	$	53,000			$	33,900
Income Tax Payable		1,275				1,050
Note Payable (long-term)		51,000				51,000
Total Liabilities		105,275				85,950
Common Stock (par $10)		96,600				96,600
Retained Earnings		51,980				32,450
Total Liabilities and Stockholders Equity	$	253,855			$	215,000

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 $111,000 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 $121,000 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 $29. After the release of its previous years financial statements, the companys stock price was $26 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?