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Required information [The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago
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[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 | $ | 36,427 | $ | 42,580 | $ | 43,476 | |||||
Accounts receivable, net | 89,700 | 62,200 | 50,200 | ||||||||
Merchandise inventory | 113,500 | 84,500 | 59,000 | ||||||||
Prepaid expenses | 11,731 | 11,177 | 4,831 | ||||||||
Plant assets, net | 359,936 | 326,521 | 277,293 | ||||||||
Total assets | $ | 611,294 | $ | 526,978 | $ | 434,800 | |||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 153,734 | $ | 89,950 | $ | 57,968 | |||||
Long-term notes payable secured by mortgages on plant assets | 116,073 | 122,417 | 97,052 | ||||||||
Common stock, $10 par value | 162,500 | 162,500 | 162,500 | ||||||||
Retained earnings | 178,987 | 152,111 | 117,280 | ||||||||
Total liabilities and equity | $ | 611,294 | $ | 526,978 | $ | 434,800 | |||||
The companys income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit:
For Year Ended December 31 | Current Yr | 1 Yr Ago | ||||||||||
Sales | $ | 794,682 | $ | 627,104 | ||||||||
Cost of goods sold | $ | 484,756 | $ | 407,618 | ||||||||
Other operating expenses | 246,351 | 158,657 | ||||||||||
Interest expense | 13,510 | 14,423 | ||||||||||
Income tax expense | 10,331 | 9,407 | ||||||||||
Total costs and expenses | 754,948 | 590,105 | ||||||||||
Net income | $ | 39,734 | $ | 36,999 | ||||||||
Earnings per share | $ | 2.45 | $ | 2.28 | ||||||||
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(1-a) Compute days' sales uncollected. (1-b) For each ratio, determine if it improved or worsened in the current year.
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