Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please put it in terms of which I can understand, the last person didn't do a good job of that and it left me even

please put it in terms of which I can understand, the last person didn't do a good job of that and it left me even more confused. image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Simon Company's year-end balance sheets follow Current YE 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 $ 31,000 $ 34,900 $ 37,100 89, 200 63,800 56,100 98,382 83,400 56, 800 10,816 9,193 3,300 345, 602 233,707 146,700 $575,000 $425,000 $300,000 $140, 312 $ 72,543 $ 38,412 109,181 95, 795 64,974 162,500 162,500 162,500 163, 007 94, 162 34, 114 $575,000 $425,000 $300,000 The company's income statements for the Current Year and 1 Year Ago follow. For Year Ended December 31 Sale Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income Current Yr $747,500 $455,975 231, 725 12,708 9,719 710, 126 $ 37,374 1 Yr Ago $505,750 $320, 738 127,955 11,632 7,586 475, 911 $ 29,839 $ 1.84 Earnings per share $ 2.30 Additional information about the company follows. Common stock market price, December 31, Current Year $28.00 Common stock market price, December 31, 1 Year Ago 26.00 Annual cash dividends per share in Current Year 0.22 Annual cash dividends per share 1 Year Ago 0.11 Common stock market price, December 31, Current Year $28.00 Common stock market price, December 31, 1 Year Ago 26.00 Annual cash dividends per share in Current Year 0.22 Annual cash dividends per share 1 Year Ago 0.11 For both the Current Year and 1 Year Ago, compute the following ratios: 1. Return on common stockholders' equity. 2. Price-earnings ratio on December 31. 2a. Assuming Simon's competitor has a price-earnings ratio of 8, which company has higher market expectations for future growth? 3. Dividend yield. Complete this question by entering your answers in the tabs below. Required 2 Required 1 Required 3 Required 2a Compute the return on common stockholders' equity for each year. Return On Common Stockholders' Equity Choose Denominator: Choose Numerator: Return On Common Stockholders' Equity Return on common stockholders' equity 01 1 Net income Net income Average common stockholders' equity 37,374 $ 29,839 Current Year: 1 Year Ago: Required 2 > Maired NEL Incode Earnings per share $ 37,374 2.30 s $ 29,839 $ 1.84 Additional information about the company follows. Common stock market price, December 31, Current Mear $28.00 Common stock market price, December 31, 1 Year Ago 26.00 Annual cash dividends per share in Current Year 0.22 Annual cash dividends per share 1 Year Ago 0.11 For both the Current Year and 1 Year Ago, compute the following ratios: 1. Return on common stockholders' equity. 2. Price earnings ratio on December 31 20. Assuming Simon's competitor has a price-earnings ratio of 8, 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 dividend yield for each year. (Round your answers to 2 decimal places.) Dividend Yield Choose Denominator: Choose Numerator: Dividend Yield Dividend yield 0 % 0 % Current Year: 1 Year Ago

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions