Simon Company's year-end balance sheets follow.

At December 31	Current Year	1 Year Ago	2 Years Ago
Assets
Cash	$ 31,451	$ 36,403	$ 37,168
Accounts receivable, net	88,473	64,335	49,558
Merchandise inventory	111,238	81,680	54,400
Prepaid expenses	10,029	9,272	4,298
Plant assets, net	281,419	258,836	237,676
Total assets	$ 522,610	$ 450,526	$ 383,100
Liabilities and Equity
Accounts payable	$ 131,431	$ 73,855	$ 50,569
Long-term notes payable	97,268	105,693	87,205
Common stock, $10 par value	163,500	163,500	162,500
Retained earnings	130,411	107,478	82,826
Total liabilities and equity	$ 522,610	$ 450,526	$ 383,100

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

Exercise 13-11 (Algo) Analyzing 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		$ 679,393		$ 536,126
Cost of goods sold	$ 414,430		$ 348,482
Other operating expenses	210,612		135,640
Interest expense	11,550		12,331
Income tax expense	8,832		8,042
Total costs and expenses		645,424		504,495
Net income		$ 33,969		$ 31,631
Earnings per share		$ 2.09		$ 1.95

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	0.36
Annual cash dividends per share 1 Year Ago	0.18

For both the current year and one year ago, compute the following ratios: 1. Return on equity. 2. Dividend yield. 3a. Price-earnings ratio on December 31. 3b. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growth?