Question
Simon Company's year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 33,850 $ 38,392 $ 42,032
Simon Company's year-end balance sheets follow.
At December 31 | Current Year | 1 Year Ago | 2 Years Ago |
---|---|---|---|
Assets | |||
Cash | $ 33,850 | $ 38,392 | $ 42,032 |
Accounts receivable, net | 94,222 | 67,872 | 55,499 |
Merchandise inventory | 118,466 | 93,311 | 57,362 |
Prepaid expenses | 10,793 | 10,181 | 4,534 |
Plant assets, net | 310,714 | 279,938 | 252,773 |
Total assets | $ 568,045 | $ 489,694 | $ 412,200 |
Liabilities and Equity | |||
Accounts payable | $ 142,858 | $ 81,931 | $ 53,322 |
Long-term notes payable | 106,792 | 112,630 | 88,363 |
Common stock, $10 par value | 162,500 | 163,500 | 162,500 |
Retained earnings | 155,895 | 131,633 | 108,015 |
Total liabilities and equity | $ 568,045 | $ 489,694 | $ 412,200 |
For both the current year and one year ago, compute the following ratios:
The companys income statements for the current year and 1 year ago, follow.
For Year Ended December 31 | Current Year | 1 Year Ago | ||
---|---|---|---|---|
Sales | $ 738,459 | $ 582,736 | ||
Cost of goods sold | $ 450,460 | $ 378,778 | ||
Other operating expenses | 228,922 | 147,432 | ||
Interest expense | 12,554 | 13,403 | ||
Income tax expense | 9,600 | 8,741 | ||
Total costs and expenses | 701,536 | 548,354 | ||
Net income | $ 36,923 | $ 34,382 | ||
Earnings per share | $ 2.27 | $ 2.12 |
For both the Current Year and 1 Year Ago, compute the following ratios:
(1-a) Profit margin ratio.
(1-b) Did profit margin improve or worsen in the Current Year versus 1 Year Ago?
(2) Total asset turnover.
(3-a) Return on total assets.
(3-b) Based on return on total assets, did Simon's operating efficiency improve or worsen in the Current Year versus 1 Year Ago?
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