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 t December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 31,800 35,625 $ 37,8ee 89,50062,500 50,20e 112,500 82,5e054,0ee 5,000 278,500 255,00 230,5e0 $523,000 $445,000 377,500 10,7009,375 Liabilities and Equity Accounts payable Long-term notes payable secured by $129,900 $ 75,250 s 51,250 mortgages on plant assets Common stock, $10 par value Retained earnings 98,500 101,500 83,500 163, 500 163,500 163,500 131 100 104,750 79,25e $523,000 $445,000 $ 377,500 Total liabilities and equity The company's income statements for the years ended December 31, 2017 and 2016, follow $673,506e $ 532,eee Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income $411,225 209,550 12,100 9,525 $ 345, 5e0 134,980 13,3e0 8,845 642,400 $ 31,100 502,625 $ 29,375 s1.8e Earnings per share $ 1.90 Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016. Exercise 13-10 Part 1 (1) Profit margin ratio. Profit Margin Ratio Choose Denominator: Current liabilities -Profit Margin Ratio = | Profit margin ratio Choose Numerator: Current assets 2017 01 %! 2016 Exercise 13-10 Part 2 (2) Total asset turnover Total Asset Turnover Choose Numerator Choose Denominator: Total Asset Tur Total asset turnover let sales End of year total assets 2017 0 times 0 times 2016 Exercise 13-10 Part 3 (3) Return on total assets. Return On Total Assets I Choose Denominator Choose Numerator = | Return on Total Assets Return on total assets 2017 2016