Exercise 13-11 Analyzing profitablllty 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, $ie par value Retained earnings Total liabilities and equity $ 31,200 $ 34,500 $ 36, 780 88,3ee 62,100 58,600 96,202 82,900 59, 200 11,628 18,599 4,192 372,670 299,901 211 308 $6ee, eee $490,888 $ 370,000 $150,894 $ 84,466 $ 49,817 111,672 111,573 89,952 162,500 162,500 162, see 174,934 131, 461 76,231 $600,eee $490,800 $ 370,000 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 $788,888 $475,888 241,800 13,250 10.148 1241. eee $ 39, eee 1 Yr Ago $ 583, 100 $379,815 147,524 13,411 8, 747 548,697 $ 34,483 $ 2.12 Earnings per share 5 2.48 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 per share in Current Year Annual cash dividends per share 1 Year Ago $ 33.00 31.00 3.28 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 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 Return on common stockholders' equity 09 Current Year: 1 Year Ago: 111 096 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 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 ws Required 2 Required 2a Required 3 Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price Earnings Ratio Choose Denominator: Choose Numerator: Price-Earnings Ratio Price-earnings ratio Current Year 0 1 Year Ago O 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 7. which company has higher market expectations for future gro 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 Choose Denominator Choose Numerator Dividend Yield Dividend yield 0 Current Year: 1 Year Ago 0196
