Simon Company's year-end balance sheets follow. Current Year 1 Year ago 2 Years Ago At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant seta, bet Total assets Liabilities and Equity Accounts payable Long-term Dates payable Common stock, $10 par value Retained earnings Total liabilities and equity $ 25,148 73,623 93,493 8,017 230,265 $430,546 $ 28,802 53,002 67,291 7,638 214, 427 $ 371,160 5 30,621 40,828 42,603 3,368 191,880 $ 309,300 $ 102,206 80,943 162,500 79,092 $ 63,353 16,220 162,500 59,082 $ 371,160 $ 40,011 69,039 163,500 36.750 309,300 For both the current year and one year ago, compute the following ratios Exercise 136 (Algo) Common-size percents LO P2 1. Express the balance sheets in common-size percents, 2. Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total assets favorable or unfavorable? 3. Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total assets favorable or unfavorable? Reg 1 Reg 2 and 3 Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1 decimal place.) SIMON COMPANY Common-slee Comparative Balance Sheets December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash % % % Accounts receivable, net Merchandise Inventory Prepaid expenses Plant assets, net Total assets % % Liabilities and Equity Accounts payable % Long-term notes payable Common stock, 510 per Retained camings Total liabilities and equity % The company's income statements for the current year and one 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 Year 5 559,710 $ 341,423 173,510 9,515 2.276 531,724 $ 27,986 $ 1.72 1 Year ago $441, 680 287,092 111,745 10,159 6,625 415,621 $ 26,099 $ 1.60 Required 1 Required 2A Required 28 Required 3A Required 38 Compute debt and equity ratio for the current year and one year ago Debt Ratio Numerator: Denominator Debt Ratio Debt ratio Current Year: 1 Year Ago: 0 % 0 % Equity Ratio Numerator: Denominator: Current Year: 1 Year Ago: - Equity Ratio Equity ratio 0 % . 0 Required 1 Required 2A Required 2B Required 3A Required 30 Compute debt-to-equity ratio for the current year and one year ago Debt-to-Equity Ratio Numerator: Denominator 1 Current Year: 1 1 Year Ago: 1 otot-To-Equity Ratio Debt-to-equity ratio Oto 1 0 to 1 Compute times interest earned for the current year and one year ago Times Interest Esmed Numarator 1 Denominator # Current Year 1 Year Ago: Time Interest Earned Times interest Gamed O times 1 1 O times Required 1A Required 15 Required 2 Required 3A Required 38 Compute profit margin ratio for the current year and one year ago. Profit Margin Ratio Numerator Denominator Current Year: 1 Year Ago: -Profit Margin Ratio Profit margin ratio % % Retured 1 Required 18 > Total Asset Turnover Denominator + Numerator Total Asset Turnover Total asset turnover Current Year: 1 Year Ago: O times O times ago. Numerator: Return On Total Assets Denominator: Return On Total Assets Current Year: Return on total assets 1 Year Ago: 0 % 0 %
