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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 | $ | 35,940 | $ | 42,011 | $ | 43,761 | |||||
Accounts receivable, net | 89,000 | 62,600 | 51,100 | ||||||||
Merchandise inventory | 110,000 | 83,500 | 57,000 | ||||||||
Prepaid expenses | 11,574 | 11,028 | 4,862 | ||||||||
Plant assets, net | 368,799 | 331,303 | 289,777 | ||||||||
Total assets | $ | 615,313 | $ | 530,442 | $ | 446,500 | |||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 151,681 | $ | 88,748 | $ | 58,349 | |||||
Long-term notes payable secured by mortgages on plant assets | 114,522 | 120,782 | 97,690 | ||||||||
Common stock, $10 par value | 162,500 | 162,500 | 162,500 | ||||||||
Retained earnings | 186,610 | 158,412 | 127,961 | ||||||||
Total liabilities and equity | $ | 615,313 | $ | 530,442 | $ | 446,500 | |||||
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 | $ | 799,907 | $ | 631,226 | ||||||||
Cost of goods sold | $ | 487,943 | $ | 410,297 | ||||||||
Other operating expenses | 247,971 | 159,700 | ||||||||||
Interest expense | 13,598 | 14,518 | ||||||||||
Income tax expense | 10,399 | 9,468 | ||||||||||
Total costs and expenses | 759,911 | 593,983 | ||||||||||
Net income | $ | 39,996 | $ | 37,243 | ||||||||
Earnings per share | $ | 2.46 | $ | 2.29 | ||||||||
(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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