#7

Use the following information for the Exercises below. (Static) [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. Current Year 1 Year Ago 2 Years Ago At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity $ 31,800 89,500 112,500 10,700 278,500 $ 523,000 $ 35,625 62,500 82,500 9, 375 255,000 $ 445,000 $ 37,800 50,200 54,000 5,000 238,500 $ 377,500 $ 129,900 98,500 163,500 131, 100 $ 523, oee $ 75, 250 101,500 163,500 104,750 $ 445,000 $ 51,250 83, 500 163,500 79, 250 $ 377,500 The company's income statements for the current year and 1 year ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income Current Year $ 673,500 $ 411, 225 209,550 12, 100 9, 525 642,400 $ 31, 100 1 Year Ago $ 532,000 $ 345,500 134,982 13,308 8,845 502,625 $ 29,375 $ 1.90 $ 1.80 Earnings per share Additional information about the company follows. Common stock market price, December 31, Current Year Common stock market price, December 31, 1 Year Ago Annual cash dividends per share in Current Year Annual cash dividends per share 1 Year Ago $ 30.00 28.00 0.29 0.24 For both the current year and one year ago, compute the following ratios: For both the current year and one year ago, compute the following ratios. 1. Return on equity. 2. Dividend yield. Ba. Price-earnings ratio on December 31. 3b. Assuming Simon's competitor has a price-earnings ratio of 10, which company has higher market expectations for future growth? Complete this question by entering your answers in the tabs below. Required 1 Required 2. Required BA Required 3B Compute the return on equity for each year. Return On Equity Numerator: Denominator: = Return On Equity = Return on equity Current Year % 1 Year Ago / = % Required 1 Required 2 GOIECTEE Required 3A Required 3B Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Dividend Yield Numerator: Denominator: = Dividend Yield Dividend yield % Current Year: 1 Year Ago: = % Required 1 Required 2 Required 3A Required 3B Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earnings Ratio Numerator: Denominator: = Price-Earnings Ratio = Price-earnings ratio 3 Current Year: JE 1 Year Ago: Required 1 Required 2 Required 3A Required BB Assuming Simon's competitor has a price-earnings ratio of 10, which company has higher market expectations for future growth? Which company has higher market expectations for future growth