Looking back over the past few years, it is clear that Nicole Mackisey has accomplished a lot running her business, Nicole?s Getaway Spa (NGS). Nicole is curious about her company?s performance as she compares its financial statements.

Required:

1. Was NGS more profitable in 2016 or 2017? Use the gross profit percentage, return on equity, and asset turnover ratio to help in making a decision. Round each ratio to two decimal places.

2. Was NGS more liquid in 2016 or 2017? Use the current ratio to help in making a decision. Round the ratio to two decimal places.

3. Was NGS more solvent in 2016 or 2017? Use the debt-to-assets ratio and times interest earned ratio to help in making a decision. Round each ratio to two decimal places.

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2015 2016 2017 Balance Sheet Cash $ 6,700 $ 3,800 1,800 $ 4,200 2,500 Accounts Receivable, Net 2,000 3,000 1,050 Inventory Prepaid Expenses Other Current Assets Total Current Assets 1,200 1,600 750 200 350 300 200 10,950 11,100 7,600 Property and Equipment 64,000 79,000 27,000 $ 34,600 $ 90,100 $ 8,000 Total Assets $74,950 Current Liabilities $ 8,000 $ 9,000 Long-Term Liabilities 35,000 50,000 14,000 Total Liabilities 43,000 58,000 23,000 Contributed Capital 25,000 30,000 10,900 Retained Earnings 6,950 2,100 700 Total Shareholders' Equity 31,950 32,100 11,600 Total Liabilities and Shareholders' Equity $74,950 $ 90,100 $ 34,600 Income Statement Sales Revenue $ 80,000 56,000 $ 44,000 Cost of Goods Sold 65,000 48,000 35,000 Gross Profit 15,000 8,000 9,000 Operating Expenses 4,000 2,000 7,000 Income from Operations 11,000 6,000 2,000 Interest Expense 1,000 3,100 800 Income Before Income Tax Expense 10,000 2,900 1,200 Income Tax Expense 3,050 800 500 Net Income $ 6,950 2,100 700