Exercise 17-11 Profitability analysis LO P3 Simon Company's year-end balance sheets follow. 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 2017 2016 2015 $ 31,300 $ 34,100 $ 36,500 89,900 64,400 50,000 107,549 84,000 59,300 11,400 9,120 3,520 359,851 238,380 170,680 $600,000 $430,000 $320,000 $144,918 $ 72,670 $ 42,662 113,928 101,867 72,134 162,500 162,500 162,500 178,654 92,963 42,704 $600,000 $430,000 $320,000 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 2017 2016 Sales $780,000 $ 511,700 Cost of goods sold $475,800 $332,605 Other operating expenses 241,800 129,460 Interest expense 13,260 11,769 Income taxes 10,140 7,676 Total costs and expenses 741,000 481,510 Net income $ 39,000 $ 30,190 Earnings per share $ 2.40 $ 1.86 Additional information about the company follows. 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 $ 33.00 31.00 0.28 0.14 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 2 Required 3 Compute the return on common stockholders' equity for each year. 2017 2016 Return On Common Stockholders' Equity Choose Numerator: Choose Denominator: I Return On Common Stockholders' Equity Return on common stockholders' equity % % Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Choose Numerator: Price Earnings Ratio Choose Denominator: 2017 2016 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the dividend yield for each year. (Round your answers to 2 decimal places.) 2017 2016 Choose Numerator: Dividend Yield Choose Denominator: < Required 2 Dividend Yield Dividend yield %