The comparative financial statements prepared a Decembr 31 f

The comparative financial statements prepared a Decembr 31 for Pinnacle Plus showed the tellowing mmrized dala 1-b. Are the-current year \"e-sults better, oreonse, than thos for he prenous ?ear? Current Year Pravious Year Incorie Statement Sales Revenue Cost ot Goods Sold $160,00 S139 DO 2 10 decimal place Gross Poi Operatins Expenses Interest Expense 00,000 46.000 5,000 71.000 41,000 5,000 37 000 11,100 25 D00 Income before Income Tax Expense income laxexpense (30%) Net Incomic 25,800 5 17.500 Balance Sheet Cash Acsounts Recvable, Net Inventory Properly and Equipmenl, Net Ectier 82 550S 28 DOO 2 D 35 000 a Compute the eaming per char for the cumcnt and prevo a. Round your answers to 2 105,000 15,000 decimel plsces Total Assets $249,550 213,000 Accounts Payable Incomc Tax Payablc Nole Payable ?long-lerm) Previous Yea 1,250 50,000 1.000 50.000 Total Liabilities Common Stock (par S10) Retained Earnings 103.250 6.000 50,300 85.000 6.000 32.000 3-b. Are the cumant year auits betar, or than thoas forhe peviou ear Total Liabilities and Stockholders\' Equity $219,550 S213 000 equty (ROE rati ror the cumant ans preo year. Round your answars to 1 decimal plaze. t During the current year cash dividends amounting to $7,600 were dedlared and paid b. Are the cument year esus better, or morae, then thos for the preu: yeer?

Solution

Answer to Part 2-a.

Net Profit Margin = Net Income / Sales * 100

Current Year:
Net Profit Margin = 25,900 / 160,000 * 100
Net Profit Margin = 16.2%

Previous Year:
Net Profit Margin = 17,500 / 139,000 * 100
Net Profit Margin = 12.6%

Answer to Part 2-b.

Current Year result is better than previous year, as Net Profit Magin has increased.

Answer to Part 3-a.

Earning per Share = Net Income / Stock Outstanding

Current Year:
Stock outstanding = 96,000 / 10 = 9,600 stock

Earning per Share = 25,900 / 9,600
Earning per Share = $2.70

Previous Year:
Stock outstanding = 96,000 / 10 = 9,600 stock

Earning per Share = 17,500 / 9,600
Earning per Share = $1.82

Answer to Part 3-b.

Current Year result is better than previous year, as Earning per share has increased.