The comparative financial statements prepared at December 31 for Pinnacle Plus showed the following summarized data Previous Year Current Year Income Statement Sales Revenue Cost of Goods Sold $145,000 $127,000 62,000 66,000 Gross Profit Operating Expenses Interest Expense 79,000 43,000 4,700 65,000 38,600 4,700 Income before Income Tax 21,700 6,510 $ 21,910 15,190 31,300 Expense Income lax Expense 9,390 (30%) Net Income Balance Sheet Cash Accounts Receivable, Net Inventory Property and Equipment, $ 78,635 $ 31,000 19,000 45,000 102,000 112,000 24,000 32,000 Net Total Assets $236,635 $207,000 Accounts Payable Income Tax Payable Note Payable (long-term) $ 49,000 34,300 850 47,000 1,175 Total Liabilities Common Stock (par $10)94,200 Retained Earnings 47,000 97,175 45,260 82,150 94,200 30,650 Total Liabilities and $236,635 $207,000 Stockholders' Equity During the current year, cash dividends amounting to $7,300 were declared and paid Required 1- Compute the gross profit percentage in the current and previous years a. (Round your answers to 1 decimal place.) Gross Profit Percentage Current Year Previous Year 1- Are the current year results better, or worse, than those for the previous b. year? Better Worse 2- Compute the net profit margin for the current and previous years. (Round a. your answers to 1 decimal place.) Net Profit Margin Current Year Previous Year 2- Are the current year results better, or worse, than those for the previous b. year? Better Worse 3- Compute the earnings per share for the current and previous years. a. (Round your answers to 2 decimal places.) Earnings er Share Current Year Previous Year 3- Are the current year results better, or worse, than those for the previous b. year? Better Worse 4- Stockholders' equity totaled $107,000 at the beginning of the previous a. year. Compute the return on equity (ROE) ratios for the current and previous years. (Round your answers to 1 decimal place.) Return on ul Current Year Previous Year 5- a. Net property and equipment totaled $117,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. (Round your answers to 2 decimal places.) Fixed Asset Turnover Current Year Previous Year 5- Are the current year results better, or worse, than those for the previous b. year? Better Worse 6- a. Compute the debt-to-assets ratios for the current and previous years (Round your answers to 2 decimal places.) Debt-to- Assets Current Year Previous Year 6- Is debt providing financing for a larger or smaller proportion of the b. company's asset growth? Larger Proportion Smaller Proportion 7- Compute the times interest earned ratios for the current and previous a. years. (Round your answers to 1 decimal place.) Times Interest Earned Current Year Previous Year 7- Are the current year results better, or worse, than those for the previous b. year? Better Worse 8 After Pinnacle Plus released its current year's financial statements, the a. company's stock was trading at $25. After the release of its previous year's financial statements, the company's stock price was $22 per share Compute the P/E ratios for both years. (Round your intermediate calculations to 2 decimal places and final answers to 1 decimal place.) Price/Earnings Ratio
