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 $114,000 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 $124,000 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 $32. After the release of its previous year's financial statements, the company's stock price was $29 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? Current Year Previous Year $180,000 80,000 100,000 50,000 5,400 44,600 13, 380 $ 31,220 $155,000 76,000 79,000 44,200 5,400 29,400 8,820 $ 20,580 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 $ 87,770 31,000 39,000 109,000 $266, 770 $ 56,000 1,350 54,000 111,350 98,400 57,020 $266, 770 $ 24,000 26,000 52,000 119,000 $221,000 $ 33,600 1,200 54,000 88,800 98,400 33,800 $221,000 Pinnacle Plus declared and paid a cash dividend of $8,000 in the current year. Its comparative financial statements, prepared at December 31, reported the following summarized information
