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

	Current Year			Previous Year
Income Statement
Sales Revenue	$	230,000		$	195,000
Cost of Goods Sold		100,000			96,000
Gross Profit		130,000			99,000
Operating Expenses		60,000			52,200
Interest Expense		6,400			6,400
Income before Income Tax Expense		63,600			40,400
Income Tax Expense (30%)		19,080			12,120
Net Income	$	44,520		$	28,280
Balance Sheet
Cash	$	100,820		$	14,000
Accounts Receivable, Net		41,000			36,000
Inventory		49,000			62,000
Property and Equipment, Net		119,000			129,000
Total Assets	$	309,820		$	241,000
Accounts Payable	$	66,000		$	32,600
Income Tax Payable		1,600			1,700
Note Payable (long-term)		64,000			64,000
Total Liabilities		131,600			98,300
Common Stock (par $10)		104,400			104,400
Retained Earnings		73,820			38,300
Total Liabilities and Stockholders Equity	$	309,820		$	241,000

During the current year, cash dividends amounting to $9,000 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.)

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.)

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.)

3-b.

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

	Better
	Worse

4-a.	Stockholders' equity totaled $124,000 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.)

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 $134,000 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.)

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.)

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.)

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 $42. After the release of its previous year's financial statements, the company's stock price was $39 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.)

8-b.

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

	More Optimistic
	Less Optimistic