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Use the following information for the Exercises below. (Algo)

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Simon Company's year-end balance sheets follow.

At December 31Current Year1 Year Ago2 Years AgoAssets Cash$ 25,232$ 30,698$ 31,347Accounts receivable, net72,38451,61541,382Merchandise inventory91,94870,98945,853Prepaid expenses8,2097,7423,449Plant assets, net238,619215,156191,469Total assets$ 436,392$ 376,200$ 313,500Liabilities and Equity Accounts payable$ 110,835$ 63,578$ 41,382Long-term notes payable82,86286,52667,205Common stock, $10 par value162,500163,500162,500Retained earnings80,19562,59642,413Total liabilities and equity$ 436,392$ 376,200$ 313,500

For both the current year and one year ago, compute the following ratios:

Exercise 13-11 (Algo) Analyzing profitability LO P3

The companys income statements for the Current Year and 1 Year Ago, follow.

For Year Ended December 31Current Year1 Year AgoSales $ 567,310 $ 447,678Cost of goods sold$ 346,059 $ 290,991 Other operating expenses175,866 113,263 Interest expense9,644 10,297 Income tax expense7,375 6,715 Total costs and expenses 538,944 421,266Net income $ 28,366 $ 26,412Earnings per share $ 1.75 $ 1.63

Additional information about the company follows.

Common stock market price, December 31, Current Year$ 28.00Common stock market price, December 31, 1 Year Ago26.00Annual cash dividends per share in Current Year0.28Annual cash dividends per share 1 Year Ago0.14

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 8, which company has higher market expectations for future growth?

Compute the return on equity for each year.

Return On Equity Numerator:/Denominator:=Return On Equity Accounts receivable, netPreferred dividends/ =Return on equityCurrent Year: / =0%1 Year Ago: / =0%

Compute the dividend yield for each year.

Note: Round your answers to 2 decimal places.

Dividend Yield Numerator:/Denominator:=Dividend Yield / =Dividend yieldCurrent Year: / =0%1 Year Ago / =0%

Compute the price-earnings ratio for each year.

Note: Round your answers to 2 decimal places.

Price-Earnings Ratio Numerator:/Denominator:=Price-Earnings Ratio Market price per common share/Earnings per share=Price-earnings ratioCurrent Year: / =01 Year Ago: / =0