Exercise 17-11 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 $ 31,800 $ 34,700 $ 37,200 88,900 64, 55,200 22,417 84,600 51,700 10,063 9,252 3,528 381,820 252, 448 172,389 $535 , $445, $ 32 , res $133, 215 $ 76,709 $ 41,395 98,568 105,421 71,427 162,500 162,5ee 162,500 140, 717 189,370 44,678 $535,000 $445,000 $ 320,000 The company's income statements for the Current Year and 1 Year Ago follow. Check my work 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 $695, see $424,255 215,605 11,824 9.842 660,726 $ 34,774 $ 2.14 1 Yr Ago $ 529,550 $344,208 133,976 12,180 7,943 498,37 $ 31,243 5 1.92 1 Additional information about the company follows ces 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 $28.00 26.00 8.38 0.19 For both the Current Year and 1 Year Ago, compute the following ratios 1. Return on common stockholders' equity 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 Rolumn on common stockholders oquity Current Year: 1 Year Ago: Required 2 > 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 Redpred2 Required 20 Required 3 Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earnings Ratio Choose Denominatori Choose Numerator: + Price Earnings Ratio Price-eamings ratio Current Year: 1 Year Ago: 1 1 Check my work 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 di Required 2 Required2 Required 3 Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growth? a Which company has higher market expectations for future growth? Required 2 Required 3 > ny 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 2 Required 3 Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Choose Numerator: Dividend Yield Choose Denominator: 1 Dividend Yield Dividend yield Current Year: 1 1 Year Ago
