Question
Simon Companys year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 27,930 $ 32,647 $ 34,355
Simon Companys year-end balance sheets follow.
At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | ||||||||
Assets | |||||||||||
Cash | $ | 27,930 | $ | 32,647 | $ | 34,355 | |||||
Accounts receivable, net | 89,800 | 62,300 | 50,900 | ||||||||
Merchandise inventory | 115,000 | 84,500 | 59,000 | ||||||||
Prepaid expenses | 8,994 | 8,570 | 3,817 | ||||||||
Plant assets, net | 241,326 | 228,405 | 206,028 | ||||||||
Total assets | $ | 483,050 | $ | 416,422 | $ | 354,100 | |||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 117,874 | $ | 68,968 | $ | 45,806 | |||||
Long-term notes payable secured by mortgages on plant assets | 88,997 | 93,862 | 76,691 | ||||||||
Common stock, $10 par value | 162,500 | 162,500 | 162,500 | ||||||||
Retained earnings | 113,679 | 91,092 | 69,103 | ||||||||
Total liabilities and equity | $ | 483,050 | $ | 416,422 | $ | 354,100 | |||||
The companys income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit:
For Year Ended December 31 | Current Yr | 1 Yr Ago | ||||||||||
Sales | $ | 627,965 | $ | 495,542 | ||||||||
Cost of goods sold | $ | 383,059 | $ | 322,102 | ||||||||
Other operating expenses | 194,669 | 125,372 | ||||||||||
Interest expense | 10,675 | 11,397 | ||||||||||
Income tax expense | 8,164 | 7,433 | ||||||||||
Total costs and expenses | 596,567 | 466,304 | ||||||||||
Net income | $ | 31,398 | $ | 29,238 | ||||||||
Earnings per share | $ | 1.93 | $ | 1.80 | ||||||||
(1-a) Compute days' sales uncollected. (1-b) For each ratio, determine if it improved or worsened in the current year.
(2-a) Compute accounts receivable turnover. (2-b) For each ratio, determine if it improved or worsened in the current year.
(3-a) Compute inventory turnover. (3-b) For each ratio, determine if it improved or worsened in the current year.
(4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year.
Required 1A Required 1B Compute days' sales uncollected. Days' Sales Uncollected 1 Choose Denominator: Choose Numerator: x Days = Days' Sales Uncollected Days' Sales Uncollected 0 days 0 days Current Yr: 1 Yr Ago: Required 1A Required 1B For each ratio, determine if it improved or worsened in the current year. Days' sales uncollected Required 2A Required 2B For each ratio, determine if it improved or worsened in the current year. Accounts receivable turnover Required 3A Required 3B For each ratio, determine if it improved or worsened in the current year Inventory turnover Required 4A Required 4B For each ratio, determine if it improved or worsened in the current year. Days sales in inventoryStep by Step Solution
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