The comparative financial statements prepared at December 31, 2017, for Pinnacle Plus showed the following summarized data:

	2017			2016
Income Statement
Sales Revenue*	$	112,000		$	101,000
Cost of Goods Sold		52,800			48,800
Gross Profit		59,200			52,200
Operating Expenses		36,600			33,600
Interest Expense		4,200			4,200
Income before Income Tax Expense		18,400			14,400
Income Tax Expense (30%)		5,520			4,320
Net Income	$	12,880		$	10,080
Balance Sheet
Cash	$	54,687		$	17,500
Accounts Receivable, Net		39,000			33,000
Inventory		26,000			40,000
Property and equipment, Net		99,000			109,000
Total Assets	$	218,687		$	199,500
Accounts Payable	$	50,887		$	38,280
Income Tax Payable		1,020			520
Note Payable, Long-Term		42,000			42,000
Total Liabilities		93,907			80,800
Contributed Capital (9,100 shares)		91,000			91,000
Retained Earnings		33,780			27,700
Total Liabilities and Shareholders' Equity	$	218,687		$	199,500

^*One-half of all sales are on credit. During 2017, cash dividends amounting to $6,800 were declared and paid. Required: 1-a. Compute the gross profit percentage in 2017 and 2016. (Round your answers to 1 decimal place.)

1-b. Is the trend going in the right direction?

multiple choice 1

• No

• Yes

2-a. Compute the net profit margin for 2017 and 2016. (Round your answers to 1 decimal place.)

2-b. Is the trend going in the right direction?

multiple choice 2

• Yes

• No

3-a. Compute the earnings per share for 2017 and 2016. (Round your answers to 2 decimal places.)

3-b. Does the trend look good or bad?

multiple choice 3

• Good

• Bad

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.)

4-b. Is the trend going in the right direction?

multiple choice 4

• No

• Yes

5-a. Net property and equipment totalled $114,000 at the end of 2015. Compute the fixed asset turnover ratios for 2017 and 2016. (Round your answers to 2 decimal places.)

5-b. Is the trend going in the right direction?

multiple choice 5

• Yes

• No

6-a. Compute the debt-to-assets ratios for 2017 and 2016. (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?

multiple choice 6

• Smaller proportion

• Larger proportion

7-a. Compute the times interest earned ratios for 2017 and 2016. (Round your answers to 1 decimal place.)

7-b. Does the outcome of ratio in 2017 appears to be good or bad for the company?

multiple choice 7

• Good

• Bad

8-a. After Pinnacle Plus released its 2017 financial statements, the company's shares were trading at $35.30. After the release of its 2016 financial statements, the company's share price was $29.50 per share. Compute the P/E ratios for both years. (Round 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?

multiple choice 8

• More optimistic

• Less optimistic