EXCERCISE 13-11 ANALYZING PROFITABILITY LO P3

Exercise 13-11 Analyzing profitability LO P3 Simon Company's year-end balance sheets follow. Current Yr1 Ago 2 Vrs Ago At December 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 Connon stock, sie par value Retained earnings Total 11abilities and equity $ 31,800 $. 35,625 $ 37,880 89,500 62,500 50,260 112,500 82,500 54,000 10,700 9,375 5,00 278,500 255.ee 230.520 $525,000 $445,000 S 377,500 $129,900 $ 75,250 $ 51,250 98, see 163,500 131, 100 5523,000 101,500 81,500 163,500 163,500 104,750 79.250 $445,000 $ 327,500 The company's Income statements for the current year and 1 year ago, follow Fort Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expertise Income tax expense Total costs and expenses Net Linco Earnings per share Current Yr 5673,500 3411 225 209,550 12,100 9.525 642.400 $ 31.16 $ 1.9e 1 Yr A $ 522,000 5345,500 134,980 13,300 3.845 5e2,625 $ 29,175 $ 1.30 Additional Information about the company follows Common stock market price, December 31Current 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 28.6 e.29 8.24 For both the Current Year and 1 Year Ago, compute the following ratios. 1. Return on common stockholders' equity 2. Price-earnings ratio on December 31 2a Assuming Simon's competitor has a price-eamings ratio of 10, which company has higher market expectations for future growth? 3. Dividend yield For both the Current Year and 1 Year Ago, compute the following ratos: 1. Return on common stockholders equity. 2. Price-earnings ratio on December 31 2a. Assuming Simon's competitor has a price-earnings ratio of 10, which company has higher market expectations for future growth? 3. Dividend yield Complete this question by entering your answers in the tabs below. Required: Required 2 Required 28 Required Compute the return on common stockholders' equity for each year. Return On Common Stockholders' Equity Choose Numerator Choose Denominator Return On Common Stockholders' Equity Return on common stockholders equity 0 % Current Year 1 Year Ago 0 1 HI Required 2 > For both the current Year and 1 Year Ago, compute the following ratios 1. Return on common stockholders equity 2. Price-earnings ratio on December 31 2a. Assuming Simon's competitor has a price earnings ratio of 10, which company has higher market expectations for future growth? 3. Dividend yield Complete this question by entering your answers in the tabs below. Required: Required 2 Required 2 Required Compute the price-earings ratio for each year. (Round your answers to 2 decimal places.) Choose Numerator Price Earnings Ratio Choose Denominator: Price-Earnings Ratio Price earnings to 0 Current Year 1 Year Agor 0 For both the Current Year and 1 Year Ago.compute the following ratios 1. Return on common stockholders equity 2. Price-eamings ratio on December 31 22. Assuming Simon's competitor has a price-earnings ratio of 10, which company has higher market expectations for future growth? 3. Dividend yield. Complete this question by entering your answers in the tabs below. Required Required 2 Required 2 Required: 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 espectations for future growth? Common stock market price, December 21, Current Year Con stock market price, Deciber 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 1 Year Ago, compute the following ratlos: 1. Return on common stockholders equity 2. Price-earings ratio on December 31 2a. Assuming Simon's competitor has a price-earnings ratio of 10, which company has higher market expectations for future growth? 3. Dividend yield Complete this question by entering your answers in the tabs below. Required i Required 2 Required 2 Required Compute the dividend yield for each year, Hound Jour arowers to 7 decimal places.) Dividende Choose Numerator Choose Denominator Current Year 1 Year Age Dividend Yield Dividend yield Q 0 %