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Exercise 13-11 Analyzing profitability LO P3 Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago $ 32,000 $ 34,400 $ 36, 400 88,600 62,700 50,900 83,625 84,900 56,100 10,959 10,083 4,376 344,816 292,917 242, 224 $560,000 $485,000 $390,000 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 140,834 $ 81,145 $ 50,965 104,227 110, 434 83,604 162,500 162,500 162,500 152,439 130,921 92,931 $560,000 $ 485,000 $390,000 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 Current Yr $ 728,000 $ 444,080 225,680 12,376 9,464 691,600 $ 36,400 1 Yr Ago $ 577,150 $375, 148 146,019 13,274 8,657 543,098 $ 34,052 Net income Earnings per share $ 2.24 $ 2.10 Additional information about the company follows. 1. Return on common stockholders' equity. 2. Price-earnings ratio on December 31. 2a. Assuming Simon's competitor has a price-earnings ratio of 8, which company has higher market expectations for future growth? 3. Dividend yield. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 2a Required 3 Compute the return on common stockholders' equity for each year. Return On Common Stockholders' Equity Choose Numerator: 1 Choose Denominator: Return On Common Stockholders' Equity Return on common stockholders' equity % / Current Year: / 1 Year Ago: 1 % Required 1 Required 2 > Required 1 Required 2 Required 2a Required 3 Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earnings Ratio Choose Numerator: / Choose Denominator: Price-Earnings Ratio Price-earnings ratio 1 Current Year: / 1 Year Ago: 1 Required 1 Required 2 Required 2a Required 3 Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Dividend Yield Choose Numerator: 1 Choose Denominator: Dividend Yield / Dividend yield Current Year: 1 = 0 % 1 Year Ago / II 0 %