Simon Companys year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 31,500 $ 34,000 $ 37,300
Simon Companys year-end balance sheets follow.
| At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | ||||||
| Assets | |||||||||
| Cash | $ | 31,500 | $ | 34,000 | $ | 37,300 | |||
| Accounts receivable, net | 88,800 | 63,600 | 55,400 | ||||||
| Merchandise inventory | 34,360 | 82,600 | 54,400 | ||||||
| Prepaid expenses | 10,063 | 9,574 | 3,889 | ||||||
| Plant assets, net | 370,277 | 280,226 | 199,011 | ||||||
| Total assets | $ | 535,000 | $ | 470,000 | $ | 350,000 | |||
| Liabilities and Equity | |||||||||
| Accounts payable | $ | 135,879 | $ | 78,636 | $ | 45,738 | |||
| Long-term notes payable secured by mortgages on plant assets | 98,568 | 109,181 | 78,124 | ||||||
| Common stock, $10 par value | 162,500 | 162,500 | 162,500 | ||||||
| Retained earnings | 138,053 | 119,683 | 63,638 | ||||||
| Total liabilities and equity | $ | 535,000 | $ | 470,000 | $ | 350,000 | |||
The companys income statements for the Current Year and 1 Year Ago, follow.
| For Year Ended December 31 | Current Yr | 1 Yr Ago | ||||||||||
| Sales | $ | 695,500 | $ | 559,300 | ||||||||
| Cost of goods sold | $ | 424,255 | $ | 363,545 | ||||||||
| Other operating expenses | 215,605 | 141,503 | ||||||||||
| Interest expense | 11,824 | 12,864 | ||||||||||
| Income tax expense | 9,042 | 8,390 | ||||||||||
| Total costs and expenses | 660,726 | 526,302 | ||||||||||
| Net income | $ | 34,774 | $ | 32,998 | ||||||||
| Earnings per share | $ | 2.14 | $ | 2.03 | ||||||||
Additional information about the company follows.
| Common stock market price, December 31, Current Year | $ | 29.00 |
| Common stock market price, December 31, 1 Year Ago | 27.00 | |
| Annual cash dividends per share in Current Year | 0.24 | |
| Annual cash dividends per share 1 Year Ago | 0.12 | |
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 7, which company has higher market expectations for future growth? 3. Dividend yield.
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Authors: ACCA Simplified
1st Edition
1492716626, 978-1492716624
