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

	2017			2016
Income Statement
Sales Revenue*	$	120,000		$	109,000
Cost of Goods Sold		56,000			52,000
Gross Profit		64,000			57,000
Operating Expenses		39,000			36,000
Interest Expense		5,000			5,000
Income before Income Tax Expense		20,000			16,000
Income Tax Expense (30%)		6,000			4,800
Net Income	$	14,000		$	11,200
Balance Sheet
Cash	$	66,400		$	14,300
Accounts Receivable, Net		47,000			37,000
Inventory		30,000			48,000
Property and equipment, Net		115,000			125,000
Total Assets	$	258,400		$	224,300
Accounts Payable	$	77,400		$	50,200
Income Tax Payable		1,100			600
Note Payable, Long-Term		50,000			50,000
Total Liabilities		128,500			100,800
Contributed Capital (9,500 shares)		95,000			95,000
Retained Earnings		34,900			28,500
Total Liabilities and Shareholders' Equity	$	258,400		$	224,300

^*One-half of all sales are on credit. During 2017, cash dividends amounting to $7,600 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

• Yes

• No

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

• No

• Yes

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

• Bad

• Good

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

• Yes

• No