Required information Exercise 13-10 Analyzing efficiency and profitability LO P3 [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow, At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 30,800 $ 35,000 $ 38,000 Accounts receivable, net 88,400 63,000 50,500 Merchandise inventory 112,500 81,600 54,500 Prepaid expenses 10,650 9,350 4,600 Plant assets, net 277,000 249,500 228,000 Total assets $519,350 $438,450 $375,600 Liabilities and Equity Accounts payable $128,800 $ 75,250 $ 51,600 Long-term notes payable secured by mortgages on plant assets 96,500 99,250 81,400 Common stock, $10 par value 162,000 162,000 162,000 Retained earningo 132,050 101,950 BO, 600 Total liabilities and equity $519,350 $438,450 S 375,600 The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Current Yr 1 Yr Ago Sales $775,000 $610,000 Cost of goods sold $ 472,750 $384,300 Other operating expenses 240, 250 140,300 Interest expense 12,300 13,400 Income tax expense 9,550 8,700 Total costs and expenses 734,850 546, 700 Net income $ 40,150 $ 63,300 Earnings per share $ 2.48 $ 3.91 For both the Current Year and 1 Year Ago, compute the following ratios: (1-a) Profit margin ratio. (1-6) Did profit margin improve or worsen in the Current Year versus 1 Year Ago? Complete this question by entering your answers in the tabs below. Required 1A Required 18 Profit margin ratio. Profit. Margin Ratio Choose Denominator Choose Numerator: Profit Margin Ratio Profit margin ratio 1 % Current Year: 1 Year Ago: 1 % (1-a) Profit margin ratio. (1-6) Did profit margin improve or worsen in the Current Year versus 1 Year Ago? Complete this question by entering your answers in the tabs below. Required 1A Required 18 Did profit margin improve or worsen in the Current Year versus 1 Year Ago? Profit margin (2) Total asset turnover Total Asset Turnover Choose Denominator: Choose Numerator: = Total Asset Turnover Total asset turnover times Current Year: 1 Year Ago: times (3-a) Return on total assets. (3-b) Based on return on total assets, did Simon's operating efficiency improve or worsen in the Current Year versus 1 Year Ago? Complete this question by entering your answers in the tabs below. Required 3A Required 38 Return on total assets Return On Total Assets Choone Denominator Choose Numerator: Return On Total Assets Return on total assets Current Year: 1 Year Ago: % (3-a) Return on total assets. (3-6) Based on return on total assets, did Simon's operating efficiency improve or worsen in the Current Year versus 1 Year Ago? Complete this question by entering your answers in the tabs below. Required 3A Required 3B Based on return on total assets, did Simon's operating efficiency improve or worsen in the Current Year versus 1 Year Ago? Retum on total assets
