Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago $ 31,700 $ 34,200 $ 37,700 89,600 63,300 57,200 12,892 82,300 58,800 10,165 8,996 3,308 390,643 231, 204 152,992 $535,000 $420,000 $ 310,000 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 $130,551 $ 70,270 $ 40,920 100,580 94,668 67,825 162,500 162,500 162,500 141,369 92,562 38,755 $535,000 $420,000 $ 310,000 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 Earnings per share Current Yr $695,500 $424,255 215, 605 11,824 9,042 660,726 $ 34,774 1 Yr Ago $ 499,800 $324,870 126, 449 11,495 7,497 470,311 $ 29,489 $ 2.14 1.81 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 $ 29.00 27.00 0.38 0.19 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 2a Required 3 Compute the return on common stockholders' equity for each year. Return On Common Stockholders' Equity Choose Numerator: 1 Choose Denominator: Return On Common Stockholders' Equity Return on common stockholders' equity 0 % Net income Preferred dividends Average common / stockholders' equity 07 $ 34,774 Current Year: 1 Year Ago: $ 29,489 - 0 1 0 % 2a. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growth? B. 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 1 Choose Denominator: Choose Numerator: Price-Earnings Ratio Price-earnings ratio 1 = Current Year: / - 0 1 Year Ago: 1 0 Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Choose Numerator: Dividend Yield 1 Choose Denominator: 1 Dividend Yield Dividend yield Current Year: 0 % 1 Year Ago 1 - 0 %
