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Current Previous Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses Interest expense Income before incore taxes Income tax expense Net Inco Balance Sheet Cash Accounts receivable (net) Inventory Property and equipment (net) $180,000 110,000 70,000 53,300 2,700 14,000 4,000 $ 10,000 $165,000 100,000 65,000 50,400 2,600 12,000 3.00 S9,000 Current Habilities Note payable (long-term) Common stock (par $5) Additional paid-in capital Retained earnings $ 4,000 19,000 40,000 45000 $100,000 $ 16,000 45,000 30,000 5,800 12,800 $108,000 $ 8,000 23,000 35,000 38.000 $104,000 $ 19,00 45,000 30,000 5,000 5.080 $184,000 Required: 1. Compute the gross profit percentage for the current and previous years. Are the current year results better, or worse than those for the previous year? 2. Compute the net profit margin for the current and previous years. Are the current year results better, or worse than those for the previous year? 3. Compute the earnings per share for the current and previous years. Are the current year results better, or worse than those for the previous year? TIP: To calculate EPS, use the balance in Common Stock to determine the number of shares outstanding Common Stock equals the par value per share times the number of shares. 4. Stockholders' equity totaled $30,000 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. Are the current year results better, or worse than those for the previous year? 5. Net property and equipment totaled $35,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. Are the current year results better, or worse, than those for the previous year? 6. Compute the debt-to-assets ratios for the current and previous years. Is debt providing financing for a larger or smaller proportion of the company's asset growth? 7. Compute the times interest earned ratios for the current and previous years. Are the current year results better, or worse than those for the previous vear

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