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

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[The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow.

At December 31	Current Year	1 Year Ago	2 Years Ago
Assets
Cash	$ 30,127	$ 34,867	$ 36,676
Accounts receivable, net	84,724	60,407	47,942
Merchandise inventory	105,437	80,630	53,122
Prepaid expenses	9,606	9,336	4,075
Plant assets, net	275,680	250,600	221,385
Total assets	$ 505,574	$ 435,840	$ 363,200
Liabilities and Equity
Accounts payable	$ 128,406	$ 74,394	$ 46,984
Long-term notes payable	95,998	101,246	77,859
Common stock, $10 par value	162,500	162,500	163,500
Retained earnings	118,670	97,700	74,857
Total liabilities and equity	$ 505,574	$ 435,840	$ 363,200

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

Exercise 13-10 (Algo) Analyzing efficiency and profitability LO P3

The companys income statements for the current year and 1 year ago, follow.

For Year Ended December 31	Current Year		1 Year Ago
Sales		$ 657,246		$ 518,650
Cost of goods sold	$ 400,920		$ 337,123
Other operating expenses	203,746		131,218
Interest expense	11,173		11,929
Income tax expense	8,544		7,780
Total costs and expenses		624,383		488,050
Net income		$ 32,863		$ 30,600
Earnings per share		$ 2.02		$ 1.88

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.

Profit Margin Ratio
	Numerator:	/	Denominator:	=	Profit Margin Ratio
		/		=	Profit margin ratio
Current Year:		/		=		%
1 Year Ago:		/		=		%