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 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 $ 31,800 89,500 112,500 10,700 278,500 $ 523,000 $ 35,625 62,500 82,500 9,375 255,000 $ 445,000 $ 37,800 50,200 54,000 5,000 230,500 $ 377,500 $ 129,900 98,500 163,500 131, 100 $ 523,000 $ 75,250 101,500 163,500 164,750 $ 445,000 $ 51,250 83,500 163,500 79,250 $ 377,500 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 Earnings per share Current Year $ 673,500 $ 411,225 209,550 12,100 9,525 642,400 $ 31,100 1 Year Ago $ 532,000 $ 345,500 134,980 13,300 8,845 502,625 $ 29,375 $ 1.80 $ 1.90 For both the Current Year and 1 Year Ago, compute the following ratios: (1-a) Profit margin ratio. (1-b) Did profit margin improve or worsen in the Current Year versus 1 Year Ago? (2) Total asset turnover. (3-a) Return on total assets. (3-b) Based on return on total assets, did Simon's operating efficiency improve or worsen in the Current Year versus 1 Year Ago? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3A Required 3B Compute profit margin ratio for the current year and one year ago. Numerator: Profit Margin Ratio 1 Denominator: I Profit Margin Ratio Profit margin ratio = I = Current Year: 1 Year Ago: I = % Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3A Required 3B Did profit margin improve or worsen in the Current Year versus 1 Year Ago? Profit margin Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3A Required 3B Compute total asset turnover for the current year and one year ago. Total Asset Turnover I Denominator: Numerator: Total Asset Turnover Total asset turnover = I IL times Current Year: 1 Year Ago: I = times Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3A Required 3B Compute return on total assets for the current year and one year ago. Return On Total Assets Numerator: I Denominator: = Return On Total Assets I = Return on total assets I = % Current Year: 1 Year Ago: I = % Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3A Required 3B Based on return on total assets, did Simon's operating efficiency improve or worsen in the Current Year versus 1 Year Ago? Return on total assets
