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

	Current Year			Previous Year
Income Statement
Sales Revenue	$	130,000		$	115,000
Cost of Goods Sold		60,000			56,000
Gross Profit		70,000			59,000
Operating Expenses		40,000			36,200
Interest Expense		4,400			4,400
Income before Income Tax Expense		25,600			18,400
Income Tax Expense (30%)		7,680			5,520
Net Income	$	17,920		$	12,880
Balance Sheet
Cash	$	74,720		$	34,000
Accounts Receivable, Net		21,000			16,000
Inventory		29,000			42,000
Property and Equipment, Net		99,000			109,000
Total Assets	$	223,720		$	201,000
Accounts Payable	$	46,000		$	34,600
Income Tax Payable		1,100			700
Note Payable (long-term)		44,000			44,000
Total Liabilities		91,100			79,300
Common Stock (par $10)		92,400			92,400
Retained Earnings		40,220			29,300
Total Liabilities and Stockholders Equity	$	223,720		$	201,000

During the current year, cash dividends amounting to $7,000 were declared and paid.

Required:

1-a.

Compute the gross profit percentage in the current and previous years. (Round your answers to 1 decimal place.)

	Gross Profit Percentage
Current Year		%
Previous Year		%

1-b.

Are the current year results better, or worse, than those for the previous year?

	Better
	Worse

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

	Net Profit Margin
Current Year		%
Previous Year		%

2-b.

Are the current year results better, or worse, than those for the previous year?

	Better
	Worse

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

	Earnings per Share
Current Year
Previous Year

3-b.

Are the current year results better, or worse, than those for the previous year?

	Better
	Worse

4-a.	Stockholders' equity totaled $104,000 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. (Round your answers to 1 decimal place.)

	Return on Equity
Current Year		%
Previous Year		%

4-b.

Are the current year results better, or worse, than those for the previous year?

	Better
	Worse

5-a.	Net property and equipment totaled $114,000 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-b.

Are the current year results better, or worse, than those for the previous 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-b.

Is debt providing financing for a larger or smaller proportion of the company's asset growth?

	Larger Proportion
	Smaller Proportion

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

	Times Interest Earned
Current Year
Previous Year

7-b.

Are the current year results better, or worse, than those for the previous year?

	Better
	Worse

8-a.

After Pinnacle Plus released its current year's financial statements, the company's stock was trading at $22. After the release of its previous year's financial statements, the company's stock price was $19 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
Current Year
Previous Year

8-b.

Does it appear that investors have become more (or less) optimistic about Pinnacle's future success?

	More Optimistic
	Less Optimistic