Question
Exercise 13-11 Profitability analysis LO P3 Simon Companys year-end balance sheets follow. At December 31 2017 2016 2015 Assets Cash $ 31,000 $ 34,200 $
Exercise 13-11 Profitability analysis LO P3
Simon Companys year-end balance sheets follow.
At December 31 | 2017 | 2016 | 2015 | ||||||
Assets | |||||||||
Cash | $ | 31,000 | $ | 34,200 | $ | 37,500 | |||
Accounts receivable, net | 89,100 | 62,700 | 51,600 | ||||||
Merchandise inventory | 42,392 | 83,300 | 59,500 | ||||||
Prepaid expenses | 11,004 | 9,960 | 4,192 | ||||||
Plant assets, net | 411,504 | 274,840 | 217,208 | ||||||
Total assets | $ | 585,000 | $ | 465,000 | $ | 370,000 | |||
Liabilities and Equity | |||||||||
Accounts payable | $ | 148,578 | $ | 76,227 | $ | 48,352 | |||
Long-term notes payable secured by mortgages on plant assets | 108,880 | 105,880 | 83,405 | ||||||
Common stock, $10 par value | 162,500 | 162,500 | 162,500 | ||||||
Retained earnings | 165,042 | 120,393 | 75,743 | ||||||
Total liabilities and equity | $ | 585,000 | $ | 465,000 | $ | 370,000 | |||
The companys income statements for the years ended December 31, 2017 and 2016, follow.
For Year Ended December 31 | 2017 | 2016 | ||||||||||
Sales | $ | 760,500 | $ | 553,350 | ||||||||
Cost of goods sold | $ | 463,905 | $ | 359,678 | ||||||||
Other operating expenses | 235,755 | 139,998 | ||||||||||
Interest expense | 12,929 | 12,727 | ||||||||||
Income taxes | 9,887 | 8,300 | ||||||||||
Total costs and expenses | 722,476 | 520,703 | ||||||||||
Net income | $ | 38,024 | $ | 32,647 | ||||||||
Earnings per share | $ | 2.34 | $ | 2.01 | ||||||||
Additional information about the company follows.
Common stock market price, December 31, 2017 | $ | 33.00 |
Common stock market price, December 31, 2016 | 31.00 | |
Annual cash dividends per share in 2017 | 0.32 | |
Annual cash dividends per share in 2016 | 0.16 | |
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.
Compute the return on common stockholders' equity for each year.
Require 1
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- Required 2
Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.)
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Require 3.
Compute the dividend yield for each year. (Round your answers to 2 decimal places.)
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