Pinnacle Plus declared and paid a cash dividend of $8,400 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information: 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 Balance Sheet Cash Accounts Receivable, Net Inventory Property and Equipment, Net Total Assets Accounts Payable Income Tax Payable Note Payable (long-term) Total Liabilities Common Stock (par $10) Retained Earnings Total Liabilities and Stockholders' Equity Current Year Previous Year $200,000 $171,000 88,000 84,000 112,000 87,000 54,000 47,400 5,800 5,800 52,200 15,660 $ 36,540 $ 92,990 35,000 43,000 113,000 $283,990 $ 60,000 1,450 33,800 10,140 $ 23,660 $ 20,000 30,000 56,000 123,000 $229,000 $ 33,200 1,400 58,000 58,000 119,450 92,600 100,800 100,800 63,740 35,600 $283,990 $229,000 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 $118,000 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 $128,000 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 Pinnacle Plus released its current year's financial statements, the company's stock was trading at $36. After the release of its previous year's financial statements, the company's stock price was $33 per share. Compute the P/E ratios for both years. Does it appear that investors have become more (or less) optimistic about Pinnacle'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 1-a. Compute the gross profit percentage in the current and previous years. (Round your answers to 1 decimal place.) 1-b. Are the current year results better, or worse, than those for the previous year? 1-a. Current Year Previous Year Gross Profit Percentage % % 1-b. Current year gross profit percentage? Better OWorse < Required 1 Required 2 > 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 2-a. Compute the net profit margin for the current and previous years. (Round your answers to 1 decimal place.) 2-b. Are the current year results better, or worse, than those for the previous year? 2-a. Net Profit Margin Current Year % Previous Year % 2-b. Current year net profit margin? Better Worse < Required 1 Required 3 > 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 3-a. Compute the earnings per share for the current and previous years. (Round your answers to 2 decimal places.) 3-b. Are the current year results better, or worse, than those for the previous year? 3-a. 3-b. Current Year Previous Year Current year EPS? Better Worse Earnings per Share < Required 2 Required 4 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 4-a. Stockholders' equity totaled $118,000 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. (Round your answers to 1 decimal place.) 4-b. Are the current year results better, or worse, than those for the previous year? 4-a. Return on Equity Current Year % Previous Year % 4-b. Current year return on equity ratio? Better OWorse < Required 3 Required 5 > 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 5-a. Net property and equipment totaled $128,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. (Round your answers to 2 decimal places.) 5-b. Are the current year results better, or worse, than those for the previous year? 5-a. Fixed Asset Turnover 5-b. Current Year Previous Year Current year fixed asset turnover? Better OWorse < Required 4 Required 6 > 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 Previous Year Debt-to-Assets 6-b. Current year debt-to-assets ratio? Larger Proportion Smaller Proportion < Required 5 Required 7 > 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. 7-b. Current Year Previous Year Times Interest Earned Current year times interest earned ratio? Better OWorse < Required 6 Required 8 > 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 Pinnacle Plus released its current year's financial statements, the company's stock was trading at $36. After the release of its previous year's financial statements, the company's stock price was $33 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 Pinnacle's future success? 8-a. Current Year 8-b. Previous Year Current year P/E ratio? More Optimistic Less Optimistic Price/Earnings Ratio < Required 7 Required 8 Show less