Required information

Skip to question

[The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow.

At December 31	Current Yr					1 Yr Ago			2 Yrs Ago
Assets
Cash		$	29,372			$	34,333		$	36,501
Accounts receivable, net			89,800				62,700			51,000
Merchandise inventory			114,500				83,000			59,000
Prepaid expenses			9,459				9,012			4,056
Plant assets, net			270,095				253,391			229,543
Total assets		$	513,226			$	442,436		$	380,100
Liabilities and Equity
Accounts payable		$	123,959			$	72,529		$	48,668
Long-term notes payable			93,592				98,707			81,482
Common stock, $10 par value			162,500				162,500			162,500
Retained earnings			133,175				108,700			87,450
Total liabilities and equity		$	513,226			$	442,436		$	380,100

The companys income statements for the current year and one year ago follow. Assume that all sales are on credit:

For Year Ended December 31	Current Yr						1 Yr Ago
Sales				$	667,194					$	526,499
Cost of goods sold	$	406,988					$	342,224
Other operating expenses		206,830						133,204
Interest expense		11,342						12,109
Income tax expense		8,674						7,897
Total costs and expenses					633,834						495,434
Net income				$	33,360					$	31,065
Earnings per share				$	2.05					$	1.91

(3-a) Compute inventory turnover. (3-b) For each ratio, determine if it improved or worsened in the current year.