Question
Simon Companys year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 31,800 $ 35,625 $ 37,800
Simon Companys year-end balance sheets follow.
At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | ||||||
Assets | |||||||||
Cash | $ | 31,800 | $ | 35,625 | $ | 37,800 | |||
Accounts receivable, net | 89,500 | 62,500 | 50,200 | ||||||
Merchandise inventory | 112,500 | 82,500 | 54,000 | ||||||
Prepaid expenses | 10,700 | 9,375 | 5,000 | ||||||
Plant assets, net | 278,500 | 255,000 | 230,500 | ||||||
Total assets | $ | 523,000 | $ | 445,000 | $ | 377,500 | |||
Liabilities and Equity | |||||||||
Accounts payable | $ | 129,900 | $ | 75,250 | $ | 51,250 | |||
Long-term notes payable secured by mortgages on plant assets | 98,500 | 101,500 | 83,500 | ||||||
Common stock, $10 par value | 163,500 | 163,500 | 163,500 | ||||||
Retained earnings | 131,100 | 104,750 | 79,250 | ||||||
Total liabilities and equity | $ | 523,000 | $ | 445,000 | $ | 377,500 |
The companys 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 | $ | 30.00 |
Common stock market price, December 31, 1 Year Ago | 28.00 | |
Annual cash dividends per share in Current Year | 0.29 | |
Annual cash dividends per share 1 Year Ago | 0.24 | |
The companys 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 | $ | 30.00 |
Common stock market price, December 31, 1 Year Ago | 28.00 | |
Annual cash dividends per share in Current Year | 0.29 | |
Annual cash dividends per share 1 Year Ago | 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.
net income | - preferred dividneds | / average common stockholders equity | % | |
current year | ||||
1 year ago |
market price per common share | earnings per share | PE ratio | |
current year | |||
1 yr ago |
annual cash dividineds per share | market price per share | dividennd yield | |
current year | |||
1 year ago |
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