Answer:
Huffman Pharmaceuticals
The percentage that should be assigned to Gross Profit, using trend analysis, is:
= 42%.
Explanation:
a) Data and Calculations:
Income Statements           12/31/2017         12/31/2016 
Sales Revenue                  $598,000          $724,000 
Cost of Goods Sold             337,000            427,000 
Gross Profit                          261,000            297,000 
Operating Expenses            137,000             146,000 
Operating Income               124,000              151,000 
Other Income (Expense)      60,000              23,000 
Income before Tax              184,000             174,000 
Income Tax Expense             71,000              76,000 
Net Income                         $113,000           $98,000
Income Statements           12/31/2017         12/31/2016 
Sales Revenue                  $598,000          $724,000 
Cost of Goods Sold             337,000            427,000 
Gross Profit                          261,000            297,000 
Ratio of Gross profit to 
  Sales Revenue
2017 = $261,000/$598,000 * 100 = 43.65% =  44%
2016 = $297,000/$724,000 * 100 = 41%
Average Gross profit ratio for the two years = 42.5% (44 + 41)/2.
b) Huffman's trend analysis is the use of its past financial performance indices to predict its future financial performances.  Past performances are expressed in percentages, forming the basis for predicting and comparing future performances of an entity.