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

	2017			2016
Income Statement
Sales Revenue*	$	127,000		$	116,000
Cost of Goods Sold		58,800			54,800
Gross Profit		68,200			61,200
Operating Expenses		41,100			38,100
Interest Expense		3,300			3,300
Income before Income Tax Expense		23,800			19,800
Income Tax Expense (30%)		7,140			5,940
Net Income	$	16,660		$	13,860
Balance Sheet
Cash	$	48,507		$	15,630
Accounts Receivable, Net		30,000			40,500
Inventory		33,500			31,000
Property and equipment, Net		81,000			91,000
Total Assets	$	193,007		$	178,130
Accounts Payable	$	30,017		$	26,400
Income Tax Payable		930			430
Note Payable, Long-Term		33,000			33,000
Total Liabilities		63,947			59,830
Contributed Capital (9,150 shares)		91,500			91,500
Retained Earnings		37,560			26,800
Total Liabilities and Shareholders' Equity	$	193,007		$	178,130

^*One-half of all sales are on credit. During 2017, cash dividends amounting to $5,900 were declared and paid

5-a. Net property and equipment totalled $96,000 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

• Bad

• Good

8-a. After Pinnacle Plus released its 2017 financial statements, the company's shares were trading at $23.79. After the release of its 2016 financial statements, the company's share price was $19.13 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