! Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Current Year 1 Year Ago 2 Years Ago $ 31,937 92,562 117,567 10,390 299,892 $ 37,712 67,329 88,090 10,199 272,832 $ 476,162 $ 552,348 Accounts payable Long-term notes payable Common stock, $10 par value $ 134,784 100,726 162,500 154,338 $ 79,667 111,708 162,500 122,287 $ 552,348 $ 476,162 Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: $ 39,684 53,981 56,346 4,365 250,524 $ 404,900 $ 53,447 87,693 162,500 101,260 $ 404,900 Exercise 13-11 (Algo) Analyzing profitability LO P3 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 $ 718,052 $ 438,012 222,596 12,207 9,335 1 Year Ago $ 566,633 682,150 $ 35,902 $ 2.21 $ 368,311 143,358 13,033 8,499 533,201 $ 33,432 $ 2.06 Earnings per share 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 $ 32.00 30.00 0.38 0.19 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? 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 Current Year: 1 Year Ago: Numerator: Denominator: = Return On Equity Return on equity % % < Required 1 Required 2 > 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.) Current Year: 1 Year Ago Numerator: Dividend Yield Denominator: Dividend Yield = Dividend yield I = % = % < Required 1 Required 3A > 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.) Current Year: 1 Year Ago: Price-Earnings Ratio Denominator: Numerator: 1 < Required 2 Required 3B > = Price-Earnings Ratio = Price-earnings ratio = = 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 6, which company has higher market expectations for future growth? Which company has higher market expectations for future growth? < Required 3A Required 3B >