Exercise 17-11 Profitability analysis LO P3 Simon Company's year-end balance sheets follow. At December 31 2017 2016 2015 Assets Cash 31,800 $ 35,625 $37,800 62,500 82,500 9,375 255,000 Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net 89,500 112,500 10,700 278,500 50,200 54,000 5,000 230,500 $523,000 $445 ,000 $377,500 Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant $129,900 $ 75,250 $ 51,250 98,500 101,500 83,500 assets Common stock, $10 par value Retained earnings 163,500 163,500 163,500 131,100 104,750 79,250 Total liabilities and $523,000 $445,000 $377,500 equity The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended 2017 2016 December 31 Sales $673,500 $532,000 Cost of goods $411,225 $345,500 sold Other operating 209,550 134,980 expenses Interest 13,300 12,100 expense 9,525 8,845 Income taxes Total costs and 642,400 502,625 expenses Net income $31,100 29,375 Earnings per 1.90 S 1.80 share Additional information about the company follows. Common stock market price, December 5 30.00 Commonstock market price, December 28.00 31, 2016 Annual cash dividends per share in 0.29 2017 Annual cash dividends per share in 0.24 2016 To help evaluate the company's profitability, compute the following ratios for 2017 and 2016: 1. Return on common stockholders' equity. 2. Price-earninas ratio on December 31 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 Required 1l 2 3 Compute the return on common stockholders' equity for each year. Return On Common Stockholders' Equity Return On Common Choose Choose Numerator: Denominator: Stockholders' Equity Return on common stockholders' equity % % 2017 2016 Required 1 Required 2 Complete this question by entering your answers in the tabs below. Required Required Required 1 2 Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earnings Ratio Price-Earnings Ratio /Choose Denominator: Choose Numerator: Price-earnings ratio 2017 2016 KRequired 1 Required 3 IIII Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Dividend Yield Dividend /Choose Denominator: Choose Numerator: Yield Dividend yield 2017 2016 0% Required 2 Required 3
