Exercise 13-11 Analyzing profitability LO P3 Simon Company's year-end balance sheets follow. At December 31 Current 1 Yr Ago 2 Yrs Ago Yr $ 31,600 $ 34,400 $ 36,300 88,900 63,500 54,300 68,210 82,500 52,300 10,136 9,193 3,444 351,154 235, 407 163,656 $550,000 $425,000 $310,000 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 $139,689 $ 73,980 $ 41,738 106,502 95,795 67,140 162,500 162,500 162,500 141,309 92,725 38,622 $550,000 $425,000 $310,000 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 Current Yr $715,000 $436,150 221,650 12,155 9,295 679,250 $ 35,750 $ 2.20 1 Yr Ago $ 505,750 $328,738 127,955 11,632 7,586 475,911 $ 29,839 Earnings per share $ 1.84 Additional information about the company follows. Common stock market price, December 31, Current $31.00 Year Common stock market price, December 31, 1 Year Ago 29.00 Annual cash dividends per share in Current Year 0.38 Annual cash dividends per share 1 Year Ago 0.19 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 6, which company has higher market expectations for future growth? 3. Dividend yield. Answer is not complete. Complete this question by entering your answers in the tabs below. Required i Required 2 Required 2a | Required 3 Compute the return on common stockholders' equity for each year. Return On Common Stockholders' Equity Choose Numerator: = Return o Choose Denominator: Average common stockholders' equity Net income Preferred dividends Return On Common Stockholders' Equity Return on common stockholders' equity 0 % 0 % $ 0 1 Current Year: 1 Year Ago: 35,750 29,839 ol