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 $ 31,900 $ 34,600 $ 37,800 89,100 62,500 59,800 88, 189 84,600 51,000 11,098 10,175 3,478 369,713 283, 125 157,922 $590,000 $475,000 $310,000 $ 143,972 $ 79,472 $ 40,920 113,138 111,435 69,195 162,500 162,500 162,500 170,390 121,593 37,385 $590,000 $475,000 $310,000 The company's income statements for the Current Year and 1 Year Ago, follow. 1 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 Earnings per share Current Yr $ 767,000 $ 467,870 237,770 13,039 9.971 728,650 $ 38,350 $367,413 143,008 13,001 B, 479 531,901 $ 33,349 $ 2.05 $ 2.36 Additional information about the company follows. Cammon 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 whare 1 Year Ago $33.00 31.00 0.28 0.14 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 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: 1 Choose Denominator: Return On Common Stockholders' Equity Return on common stockholdersequity Current Year 1 Year Ago: Required 2 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. 20. Assuming Simon's competitor has a price earnings ratio of 6, which company has higher market expectations for future growth? 3. Dividend yield Complete this question by entering your answers in the tabs below. + nces Required Required 2 Required 20 Required 3 Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Emines Bette Choose Nurnerator Choose Denominator - Price Earnings Ratio Price earnings ratio Current Year 1 1 Year Ago: 1 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 gr 3. Dividend yield. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 2a Required 3 Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Dividend Yield 1 Choose Denominator: Choose Numerator: Dividend Yield Dividend yield % 2 Current Year: 1 Year Ago % Required 28
