Exercise 13-11 Analyzing profitability LO P3 Simon Company's year-end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs Ago 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 $ 34,100 $ 37,000 89,400 63,600 56,600 83,087 83,400 54,600 11,531 9,135 3,920 378,982 244,765 207,880 $595,000 $435,000 $360,000 $146,6731 $ 72,780 $ 47,520 114,097 100,050 81,151 162,500 162,500 162,500 171,730 99,670 68,829 $595,000 $435,000 $360,000 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 Net income Earnings per share Current Yr $ 773,500 $ 471,835 239,785 13,150 10,056 734,826 $ 38,674 $ 2.38 1 Yr Ago $ 517,650 $336, 473 130,965 11,906 7,765 487, 109 $ 30,541 $ 1.88 Additional Information about the company follows. Common stock market price, December 31, Current Year $31.00 30 AM Additional information about the company follows. Common stock market price, December 31, Current Year Common stock market price, December 31, 1 Year ago Annual cash dividends por share in Current Year Annual cash dividends per share 1 Year ago $31.00 29.00 0.22 0.11 For both the Current Year and 1 Year Ago, compute the following ratios: 1. Return on common stockholders' equity 2. Price-earings 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: 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 Retum on common stockholders' equity Current Year: 1 Year Ago: R Required 2 > Check Additional information about the company follows. $31.00 Common stock market price, December 31, Current 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 29.00 0.22 0.11 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 7, which company has higher market expectations for future grow 3. Dividend yield. Complete this question by entering your answers in the tabs below. es Required: Required 2 Required 2a Required 3 Compute the price-carnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earings Ratio Choose Numerator: Choose Denominator Price-Earnings Ratio Price earnings ratio Current Year: 1 Year Ago:
