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Required information Skip to question [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31Current Year1 Year

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[The following information applies to the questions displayed below.]

Simon Company's year-end balance sheets follow.

At December 31Current Year1 Year Ago2 Years AgoAssets Cash$ 34,596$ 39,239$ 41,696Accounts receivable, net98,28570,06952,895Merchandise inventory126,07193,51759,806Prepaid expenses10,92110,5104,498Plant assets, net310,700287,159250,005Total assets$ 580,573$ 500,494$ 408,900Liabilities and Equity Accounts payable$ 147,454$ 82,046$ 53,435Long-term notes payable110,239112,81191,271Common stock, $10 par value162,500162,500162,500Retained earnings160,380143,137101,694Total liabilities and equity$ 580,573$ 500,494$ 408,900

For both the current year and one year ago, compute the following ratios:

The companys income statements for the Current Year and 1 Year Ago, follow.

For Year Ended December 31Current Year1 Year AgoSales $ 754,745 $ 595,588Cost of goods sold$ 460,394 $ 387,132 Other operating expenses233,971 150,684 Interest expense12,831 13,699 Income tax expense9,812 8,934 Total costs and expenses 717,008 560,449Net income $ 37,737 $ 35,139Earnings per share $ 2.32 $ 2.16

Additional information about the company follows.

Common stock market price, December 31, Current Year$ 28.00Common stock market price, December 31, 1 Year Ago26.00Annual cash dividends per share in Current Year0.20Annual cash dividends per share 1 Year Ago0.10

For both the current year and one year ago, compute the following ratios:

1. Return on equity.

2. Dividend yield.

3a. Price-earnings ratio on December 31.

3b. Assuming Simon's competitor has a price-earnings ratio of 6, which company has higher market expectations for future growth?

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