where there is an increased likelihood of misstatements. PARTI The purpose of Part I is to perform preliminary analytical procedures as part of the lytical procedures obtaining an understanding about the client's business and indo planning process. You have been asked to focus your attention on two purposes 2. Refer to the financial statement data in Figure 8-9 for the current year and Required two years. Analyze the year-to-year change in account balance for at financial statement line items. Document the trend analysis in a format simo following: % Change 2015-2016 Account Balance Net sales b. Calculate at least five common ratios shown in Chapter 7 on pages 196-1992 document them in a format similar to the following: Ratio 2016 2015 Current ratio Change 2014-2015 2014 C. Based on the analytical procedures calculated in parts a. and b., summarize observations about Pinnacle's business, including your assessment of the ches business risk. d. Go to the Pinnacle link on the textbook Web site (www.pearsonhighered.com/are and open the Pinnacle income statement, which is located in the Pinnacle Incom ment information to prepare a common-size income statement for all three year Statement worksheet of the Pinnacle_Financials Excel file. Use the income se which you believe there is a concern about material misstatements. Use a forma See Figure 8-4 (p. 233) for an example. Use the information to identify accounts for similar to the following: Account Balance Estimate of $ Amount of Potential Misstatement PROCESS TRIST Co requirement de Dne the three divisional income statements in the Panade Financial Feed file on the Web site to prepare a commesse income Gade the three divisions for all three years. Each division's income statement is in a separate sheet in the Excel file. Use the information to identify access for which you believe there is a concern about material minstatements. Use a forma similar to the one Baplain whether you believe the information in requirement de ore provides the most useful data for evaluating the potential for misstatemem Explain why Analyze the account balances for accounts receivable events and shortcut long-term debt. Describe any observations about those accounts and discuss add- tional information you want to consider during the current year it. Based on your calculations, assess the likelihood thigh, medium.celow that made is likely to fail financially in the next 12 months Cate/ROIT RANNG AND MATELITY