Exercise 13-10 Efficiency and profitability analysis LO P3 [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. 2017 2016 2015 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 secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 32,000 $ 35,250 $ 38,200 88,800 63,500 49,500 113,000 83,200 54,500 10,500 9,400 5,200 280,000 253,000 229,000 $524,300 $444,350 $376,400 $128,000 $ 74,000 $ 50,400 97,500 101,750 80,400 162,000 162,000 162,000 136,800 106,600 83,600 $524,300 $444,350 $376,400 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 $745,000 $461,900 223,500 11,800 9,350 706,550 $ 38,450 2016 $610,000 $390,400 140,300 13,500 9,000 553,200 $ 56,800 3.51 $ 2.37 $ $745,000 $610,000 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share $461,900 223,500 11,800 9,350 $390,400 140,300 13,500 9,000 706,550 $ 38,450 $ 2.37 553,200 $ 56,800 $ 3.51 Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016. Exercise 13-10 Part 1 (1) Profit margin ratio. Choose Numerator: Profit Margin Ratio Choose Denominator: / Profit Margin Ratio Profit margin ratio % 2017 1 2016 % Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016, Exercise 13-10 Part 2 (2) Total asset turnover. Total Asset Turnover Choose Denominator: Choose Numerator: 11 = Total Asset Turnover Total asset turnover times 2017 2016 times Exercise 13-10 Part 3 (3) Return on total assets. Choose Numerator: Return On Total Assets Choose Denominator: Return On Total Assets Return on total assets 2017 % 2016 %
