Required information Exercise 17-10 Efficiency and profitability analysis LO P3 [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. 2017 2016 2015 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 $ 32,200 $ 35,250 $ 37,400 86,600 61,500 49,000 112,500 80,800 54,500 10,500 9,200 279,000 249,000 227,000 $520,800 $435,750 $ 372,800 4,900 $ 128,400 $ 72,250 $ 50,400 96,000 98,000 83,000 162,500 162,500 162,500 133,900 103,000 76,900 $520,800 $435,750 $372,800 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income 2017 $ 705,000 $430,050 211,500 12,200 9,500 663, 250 $ 41,750 2016 $540,000 $345,600 129,600 13,500 8,525 497, 225 $ 42,775 Earnings per share $ 2.57 $ 2.63 Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016. Exercise 17-10 Part 1 (1) Profit margin ratio. Profit Margin Ratio 1 Choose Denominator: Choose Numerator: II = = / II Profit Margin Ratio Profit margin ratio % 2017 / 2016 / = II % Exercise 17-10 Part 2 (2) Total asset turnover. Total Asset Turnover Choose Numerator: | Choose Denominator: Il = Total Asset Turnover Total asset turnover / II = = 2017 / II times 2016 / = II times Exercise 17-10 Part 3 (3) Return on total assets. Choose Numerator: Return On Total Assets I Choose Denominator: 1 = Return On Total Assets = II Return on total assets 2017 / = % 2016 1 II %