Saved . Exercise 13-11 Analyzing profitability LO P3 Simon Company's year-end balance sheets follow. Current 1 Yr Ago 2 Yrs 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 secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 31,100 $ 34,400 $ 37,200 88,300 62,400 56,700 34,031 82,900 56,000 10,251 10,067 4,532 381,318 280,233 245,568 $545,000 $470,000 $400,000 $132,991 $ 79,430 $ 52,800 104,509 104,857 86,632 162,500 162,500 162,500 145,000 123,213 98,068 $545,000 $470,000 $400,000 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 Yr $ 708,500 $432,185 219,635 12.045 9,211 673,076 $ 35.424 1 Yr Ago $ 559,300 $363,545 141,503 12,864 8,390 526, 302 $ 32.998 $ 2.03 Earnings per share Additional information about the company follows. 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 For both the Current Year and 1 Year Ago, compute the following ratios: 1. Return on common stockholders' equity 2. Price-earnings ratio on December 31. 2a. Assuming Simon's competitor has a price-earnings ratio of 8 which company has higher market expectations 3. Dividend yield, Complete this question by entering your Required 1 Required 2 Required 2a Required 3 Compute the retum on common stockholders' equity for each year Beturn On Common Stockholders' Equity Choose Numerator Choose Denominat Return On Common Stockholders Return on common stockholders equity Current Year: 1 Year Ago: Required 2 > 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 $30.00 28.00 0.34 0.17 For both the current Year and 1 Year Ago, compute the following ratios: 1. Return on common stockholders' equity. 2. Price-earnings ratio on December 31. 2a. Assuming Simon's competitor has a price-earnings ratio of 8, which company has higher market ex 3. Dividend yield. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 2a Required 3 Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earnings Ratio Choose Denominator: Choose Numerator: = Price-Earnings Ratio Price-earnings ratio Current Year: 1 Year Ago: 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 $30.00 28.00 0.34 0.17 For both the Current Year and 1 Year Ago, compute the following ratios: 1. Return on common stockholders' equity. 2. Price-earnings ratio on December 31. 2a. Assuming Simon's competitor has a price-earnings ratio of 8, which company has highern 3. Dividend yield. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 2a Required 3 Assuming Simon's competitor has a price-earnings ratio of 8, which company has higher market ex growth? Which company has higher market expectations for future growth? ditional 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 $30.00 28.00 0.34 or both the Current Year and 1 Year Ago, compute the following ratios: . Return on common stockholders' equity. 2. Price-earnings ratio on December 31. 2a. Assuming Simon's competitor has a price-earnings ratio of 8, which company has higher market expectatic 3. Dividend yield. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 2a Required 3 Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Choose Numerator: Dividend Yield Choose Denominator Dividend Yield Dividend yield Current Year: 2 1 Year Ago 2 3 4 5 6 7 8
