The comparative financial statements prepared at December 31, 2017, for Pinnacle Plus showed the following summarized data: 
The comparative financial statements prepared at December 31, 2017, for Pinnacle Plus showed the following summarized data: 2017 2016 $113,000 $102,000 53,200 49,200 Income Statement Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) 59,800 36,900 4,300 52,800 33,900 4,300 18,600 5,580 14,600 4,380 Net Income $ 13,020 $ 10,220 Balance Sheet Cash Accounts Receivable, Net Inventory Property and equipment, Net $ 55,805 $ 17,030 40,000 33,500 26,500 41,000 101,000 111,000 Total Assets $223,305 $ 202,530 $ 53,855 $ 39,700 1,030 530 43,000 43,000 Accounts Payable Income Tax Payable Note Payable, Long-Term Total Liabilities Contributed Capital (9,150 shares) Retained Earningst 97,885 91,500 33,920 83,230 91,500 27,800 Total Liabilities and Shareholders' Equity $223,305 $ 202,530 One-half of all sales are on credit. During 2017, cash dividends amounting to $6,900 were declared and paid. Required: 1-a. Compute the gross profit percentage in 2017 and 2016. (Round your answers to 1 decimal place.) Gross Profit Percentage % 2017 2016 % 1-b. Is the trend going in the right direction? O Yes 2-a. Compute the net profit margin for 2017 and 2016. (Round your answers to 1 decimal place.) 2017 2016 Net Profit Margin % % 2-b. Is the trend going in the right direction? O 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-b. Does the trend look good or bad? Good O 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.) 2017 Return on Equity % % 2016 4-b. Is the trend going in the right direction? Yes No 5-a. Net property and equipment totalled $116,000 at the end of 2015. Compute the fixed asset turnover ratios for 2017 and 2016. (Round your answers to 2 decimal places.) Fixed Asset Turnover 2017 2016 5-b. Is the trend going in the right direction? O No Yes 6-a. Compute the debt-to-assets ratios for 2017 and 2016. (Round your answers to 2 decimal places.) Debt-to- Assets 2016 6-b. Is debt providing financing for a larger or smaller proportion of the company's asset growth? O Larger proportion OSmaller proportion 7-a. Compute the times interest earned ratios for 2017 and 2016. (Round your answers to 1 decimal place.) 2017 Times Interest Earned times times 2016 7-b. Does the outcome of ratio in 2017 appears to be good or bad for the company? O Good O Bad 8-a. After Pinnacle Plus released its 2017 financial statements, the company's shares were trading at $36.50. After the release of its 2016 financial statements, the company's share price was $30.50 per share. Compute the P/E ratios for both years. (Round intermediate calculations to 2 decimal places and final answers to 1 decimal place.) Price Earnings 2017 2016 8-b. Does it appear that investors have become more or less) optimistic about Pinnacle's future success? O Less optimistic O More optimistic
