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3 The comparative financial statements prepared at December 31, 2017, for Pinnacle Plus showed the following summarized data: 2017 2016 10 points Income Statement Sales Revenue* Cost of Goods Sold $124,000 $113,000 57,600 53,600 Gross Profit Operating Expenses Interest Expense eBook 66,400 40,200 3,600 59,400 37,200 3,600 Print Income before Income Tax Expense Income Tax Expense (30%) 22,600 6, 780 18,600 5,580 References Net Income $ 15,820 $ 13,020 Balance Sheet Cash Accounts Receivable, Net Inventory Property and equipment, Net $ 47,461 $ 13,740 33,000 39,000 32,000 34,000 87,000 97,000 Total Assets $199,461 $183, 740 Accounts Payable Income Tax Payable Note Payable, Long-Term $ 35,781 $30, 180 960 460 36,000 36,000 Total Liabilities Contributed Capital (9,000 shares) Retained Earningst 72,741 90,000 36,720 66,640 90,000 27.100 Total Liabilities and Shareholders Equity $ 199,461 $183, 740 3 *One-half of all sales are on credit. During 2017, cash dividends amounting to $6,200 were declared and paid. 10 points Required: 1-a. Compute the gross profit percentage in 2017 and 2016. (Round your answers to 1 decimal place.) eBook Gross Profit Percentage % Print 2017 References 2016 % 1-b. Is the trend going in the right direction? Yes No 3 2-a. Compute the net profit margin for 2017 and 2016. (Round your answers to 1 decimal place.) Net Profit Margin 10 2017 points % 2016 % eBook Print References 2-b. Is the trend going in the right direction? Yes O No 3-a. Compute the earnings per share for 2017 and 2016. (Round your answers to 2 decimal places.) Earnings per Share 2017 2016 3 3-b. Does the trend look good or bad? o Good Bad 10 points eBook 4-a. Shareholders' equity totalled $100,000 at the end of 2015. Compute the return on equity (ROE) ratios for 2017 and 2016. (Round your answers to 1 decimal place.) Print References Return on Equity % 2017 2016 96 4-b. Is the trend going in the right direction? Yes No 3 5-a. Net property and equipment totalled $102,000 at the end of 2015. Compute the fixed asset turnover ratios for 2017 and 2016 (Round your answers to 2 decimal places.) Fixed Asset Tumover 10 points 2017 2016 eBook Print References 5-b. Is the trend going in the right direction? Yes No 6-a. Compute the debt-to-assets ratios for 2017 and 2016. (Round your answers to 2 decimal places.) Debt-to- Assets 2017 2016 3 6-b. Is debt providing financing for a larger or smaller proportion of the company's asset growth? OSmaller proportion Larger proportion 10 points eBook 7-a. Compute the times interest earned ratios for 2017 and 2016. (Round your answers to 1 decimal place.) Print References Times Interest Earned times 2017 2016 times 7-b. Does the outcome of ratio in 2017 appears to be good or bad for the company? O Good Bad eBook 8-e. After Pinnacle Plus released its 2017 financial statements, the company's shares were trading at $27.80. After the release of its 2016 financial statements, the company's share price was $22.70 per share. Compute the P/E ratios for both years. (Round intermediate calculations to 2 decimal places and final answers to 1 decimal place.) Print References Pricel Earnings 2017 2016 8-b. Does it appear that investors have become more (or less) optimistic about Pinnacle's future success? More optimistic O Less optimistic