The comparative financial statements prepared at December 31 for Golden Corporation showed the following summarized data: Current Previous Income Statement Sales revenue Cost of goods sold $280,000 150,000 $245,000 140,000 Gross profit Operating expenses Interest expense 130,000 73,300 4,700 105,000 66,400 4,600 Income before income taxes Income tax expense 52,000 15,600 34.000 5,000 Net income $ 36,400 $ 29,000 $ Balance Sheet Cash Accounts receivable (net) Inventory Property and equipment (net) 8,100 39,000 60,000 65,000 $ 10,000 33,000 55,000 58,000 $172,100 $156,000 Current liabilities Note payable (long-term) Common stock (par $5) Additional paid-in capital Retained earnings* $ 15,700 65,000 42,000 9,000 40,400 $ 33,000 65,000 42,000 7,000 9,000 $172,100 $156,000 *During the current year, cash dividends of $5,000 were declared and paid. Required: 1-a. Compute the gross profit percentage for the current and previous years. (Round your answers to 1 decimal place.) Gross Profit Percentage Current Year Previous Year 1-b. Are the current year results better, or worse, than those for the previous year? Better O Worse 2-a. Compute the net profit margin for the current and previous years. (Round your answers to 1 decima place.) Net Profit Margin Current Year Previous Year 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. 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. (Round you answers to 2 decimal places.) Earnings per Share Current Year Previous Year 3-b. Are the current year results better, or worse, than those for the previous year? Better Worse 4-a. Stockholders' equity totaled $42,000 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-a. Stockholders' equity totaled $42,000 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.) Current Year Previous Year Return on Equity % % 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 $45,000 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.) Fixed Asset Turnover Current Year Previous Year 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.) Debt-to-Assets Current Year Previous Year 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.) Times Interest Earned Current Year Previous Year 7-b. Are the current year results better, or worse, than those for the previous year? Better Worse 8-a. After Golden released its current year's financial statements, the company's stock was trading at $50. After the release of its previous year's financial statements, the company's stock price was $38 per share. Compute the P/E ratios for both years. (Round your intermediate calculations and final answers to 2 decimal places.) Price/Earnings Ratio Current Year Previous Year 8-b. Does it appear that investors have become more or less) optimistic about Golden's future success? More Optimistic Less Optimistic References eBook & Resources