Required information (The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. Current Year 1 Year Ago 2 Years Ago $ 27,134 79,452 101,935 8,828 256, 766 $ 474, 115 $ 32,698 57,793 74, 101 8,411 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 Common stock, $10 par value Retained earnings Total liabilities and equity $ 32,708 45,858 48,849 3,634 209,551 $ 340,600 235,717 $ 408, 720 $ 120,416 90,025 162,500 101,174 $ 474, 115 $ 69,764 92,125 162,500 84,331 $ 488,720 $ 43,610 77,531 163,500 55,959 $ 340,600 The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income Current Year $ 616, 350 $ 375,974 191,069 10,478 8,013 585,534 $ 30,816 1 Year Ago $ 486,377 $ 316,145 123,053 11,187 7,296 457,681 $ 28,696 Earnings per share $ 1.90 $ 1.77 Additional information about the company follows. Common stock market price, December 31, Current Year Common stock market price, December 31, 1 Year Ago Annual cash dividends per share in Current Year Annual cash dividends per share 1 Year Ago $ 33.00 31.00 0.24 0.12 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 7, which company has higher market expectations for future growth? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 3B Compute the return on equity for each year. Return On Equity Numerator: 1 Preferred dividends 1 Denominator: Return On Equity Return on equity = / - Current Year: 1 Year Ago: % % Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 3B Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Numerator: Dividend Yield 1 1 Denominator: = Dividend Yield Dividend yield % / Current Year: 1 Year Ago = % Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 3B Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Numerator: Price-Earnings Ratio 1 Denominator: 1 Price-Earnings Ratio Price-earnings ratio Il Current Year: / = 1 Year Ago: / 11 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 3B Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growth? Which company has higher market expectations for future growth?
