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 $ 31,300 $ 34,200 $ 36,800 88,900 63,000 56, 100 45, 757 82,500 51,800 11,514 9,875 4,151 422,529 285,425 221, 149 $600,000 $475,000 $370,000 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 $147,906 $ 80,275 $ 49, 328 115,056 112,528 81,770 162,500 162,500 162,500 174,538 119,697 76,402 $600,000 $475,000 $370,000 The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Current Yr 1 Yr Ago ANA The company's income statements for the Current Year and 1 Year Ago, follow. 1 Yr Ago $565, 250 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 Yr $780,000 $475, 800 241, 800 13,260 10, 140 741,000 $ 39,000 $367,413 143, 008 13, 001 8,479 531,901 $ 33, 349 Earnings per share $ 2.40 $ 2.05 Additional information about the company follows. Common stock market price, December 31, Current $34.00 Year Common stock market price, December 31, 1 Year Ago 32.00 Annual cash dividends per share in Current Year 0.36 Annual cash dividends per share 1 Year Ago 0.18 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. 1. Return on common stockholders' equity. 2. Price earnings ratio on December 31 2a. Assuming Simon's competitor has a price-earnings ratio of 7, 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: Choose Denominator: Return On Common Stockholders' Equity Returit on common stockholders' equity Current Year: 1 Year Ago: Required 2 >