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 Accounts payable $ 488,993 $ 125,412 Long-term notes payable Common stock, $10 par value Retained earnings 163,500 107,231 Total liabilities and equity $ 488,993 Current Year 1 Year Ago 2 Years Ago $ 33,724 57,246 $ 28,851 81,945 107,236 9,198 261,763 92,850 76,426 8,852 245,298 $ 421,546 $ 71,954 99,864 162,500 87,228 $ 33,755 45,915 48,905 3,864 211,961 $ 344,400 $ 44,552 73,829 162,500 63,519 $ 344,400 $ 421,546 For both the current year and one year ago, compute the following ratios: 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 Earnings per share Current Year $ 635,691 $ 387,772 197,064 10,807 8,264 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 603,907 $ 31,784 $ 1.96 1 Year Ago $ 326,066 126,915 11,538 7,525 $ 33.00 31.00 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. 0.36 0.18 $ 501,640 472,044 $ 29,596 $ 1.82 3b. Assuming Simon's competitor has a price-earnings ratio of 8, 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: Denominator: Return On Equity Net income Average total equity Current Year: $ 1 Year Ago: $ 31,784 / 29,596 / Return on equity 0% 0 % < Required 1 Required 2 > Required 1 Required 2 Required 3A Required 3B Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Dividend Yield Numerator: Annual cash dividends per share Denominator: Market price per share = Dividend Yield = Dividend yield Current Year: $ 0.36 $ 33.00 = 1.1 % 1 Year Ago 0.18/ $ 31.00 = 0.6 % < Required 1 Required 3A > Required 1 Required 2 Required 3A Required 3B Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earnings Ratio Numerator: Market price per common share Denominator: Earnings per share = Price-Earnings Ratio = Price-earnings ratio Current Year: $ 33.00/ = 0 1 Year Ago: $ 31.00/ = 0 < Required 2 Required 3B >