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. 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 $ 34,581 101,218 121,024 10,805 312,685 $ 580,313 $ 40,422 70,738 90,699 10,506 287,905 $ 500, 270 $ 42,957 57,276 60,407 4,726 260,034 $ 425,400 $ 144,498 108,008 163,500 164, 307 $ 580,313 $ 86,237 113,911 163,500 136,622 $ 500, 270 $ 57,837 93,073 162,500 111,990 $ 425,400 Exercise 17-10 (Algo) Analyzing efficiency and 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 $ 754,407 $ 460,188 233,866 12,825 9,807 716,686 $ 37,721 1 Year Ago $ 595,321 $ 386,959 150,616 13,692 8,930 560,197 $ 35,124 $ 2.32 $ 2.16 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? Required 1A Required 1B Required 2 Required 3A Required 3B Compute profit margin ratio for the current year and one year ago. Profit Margin Ratio 1 Numerator: Denominator: 1 = = Profit Margin Ratio Profit margin ratio % 1 Current Year: 1 Year Ago: = % Total Asset Turnover Numerator: Denominator: II / II Total Asset Turnover Total asset turnover times times Current Year: 1 Year Ago: Return On Total Assets Denominator: Numerator: = Return On Total Assets Return on total assets = 1 I! % Current Year: 1 Year Ago: I! % 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 Return on total assets