Simon Company's year-end balance sheets follow. At December 31 Assets Cash Current YT 1 Yr Ago 2 Yrs Ago $ 31,800 $ 35,625 $ 37,800 89,500 62,500 50,200 112,500 82,500 54.000 10,700 9,375 5,000 278,500 255,000 230,500 $ 523,000 $445,000 $ 377,500 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 $ 129,900 $ 75,250 $ 51,250 98,500 101,500 83,500 163,500 163,500 163,500 131,100 104,750 79,250 $ 523,000 $445,000 $ 377,500 The company's income statements for the current year and 1 year ago, follow. For Year Ended December 31 Current Yr 1 Yr Ago Sales $673,500 $ 532,000 Cost of goods sold $411,225 $345,500 Other operating expenses 209,550 134.980 Interest expense 12,100 13,300 Income tax expense 9,525 8,845 Total costs and expenses 642,400 502,625 Net income $ 31,100 $ 29,375 Earnings per share $ 1.90 $ 1.80 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 0.29 0.24 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 10, which company has higher market expectations for future growth? 3. Dividend yield. Required 1 Required 2 Required 20 Required 3 Compute the return on common stockholders' equity for each year. Return On Common Stockholders' Equity Choose Numerator Choose Denominator: Return On Common Stockholders' Equity Return on common stockholders' equity Current Year % 1 Year Ago % mogurt Required 2 > 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 Numerator: 1 Choose Denominator: Price-Earnings Ratio 1 Price-earnings ratio Current Year: 1 Year Ago: 11 1 11 Required 1 Required 2 Required 2a Required 3 Assuming Simon's competitor has a price-earnings ratio of 10, which company has higher market expectations for future growth? Which company has higher market expectations for future growth? (Required 2 Required 3 > 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 1 Choose Denominator: / 1 1 11 Dividend Yield Dividend yield % Current Year: 1 Year Ago: %
