Exercise 13-11 Profitability analysis LO P3 Simon Company's year-end balance sheets follow. Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets 31,800 34,800 37,500 89,600 63,900 51,000 2,389 85,000 59,200 3,773 459,906 261,745 198,527 $595,000 $455,000 $350,000 11,305 9,555 Liabilities and Equity Accounts payable Long-term notes payable secured by $143,710 78,433 $ 47,586 mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 110,741 103,603 76,576 162,500 162,500 162,500 178,049 110,464 63,338 $595, 000 $455,000 $ 350,000 The company's income statements for the years ended December 31, 2017 and 2016, follow. 2017 r Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income 2016 $773,500 $541,450 $471,835 239,785 13,150 10,056 $351,943 136,987 12,453 8,122 34,826 509, 505 31,945 38,674 Earnings per share $ 2.38 $1.97 Additional information about the company follows Additional information about the company follows. Common stock narket price, Decenber 31, 2017 Common stock market price, Decenber 31, 2016 Annual cash dividends per share in 2017 Annual cash dividends per share in 2016 $32.00 30.00 0.20 0.10 To help evaluate the company's profitability, compute the following ratios for 2017 and 2016: 1. Return on common stockholders' equity 2. Price-earnings ratio on December 31 3. Dividend yield. Complete this question by entering your answers in the tabs below Required Required 2 Reqairod Compute the reture on common stockholders' equity for each year. Return On Common Stockholders' Equity Return On Common Stockholders Choose Numerator: / Choose Denominator: Return on common stockholders equity 2017 2016 Required 2> $32.00 30.00 0.20 0.10 Common stock market price, December 31, 2017 Common stock market price, December 31, 2016 Annual cash dividends per share in 2017 Annual cash dividends per share in 2016 To help evaluate the company's profitability, compute the following ratios for 2017 and 2016: 1. Return on common stockholders' equity. 2. Price-earnings ratio on December 31 3. Dividend yield Complete this question by entering your answers in the tabs below. Required 1 Required 2Required 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 2017 2016 Required 1 Required 3> 0.20 0.10 Annual cash dividends per share in 2017 Annual cash dividends per share in 2016 To help evaluate the company's profitability, compute the following ratios for 2017 and 2016: 1. Return on common stockholders' equity 2. Price-earnings ratio on December 31. 3. Dividend yield. Complete this question by entering your answers in the tabs below Required 1 Required 2Requid 3 Rsn bepaengs Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Dividend Yield / Choose Denominator: Dividend Yield Choose Numerator: Dividend yield 2017 2016 Required 2
