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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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