Simon Company's year-end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs Ago At December 31 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 $ 31,100 $ 34,200 $ 37,100 88,800 63,700 55,700 91, 194 82,700 51,000 9,781 8,940 4,079 299, 125 240,460 212, 121 $520,000 $430,000 $360,000 $126,890 $ 74,123 $ 47,045 95,805 100,878 77, 173 162,500 162,500 162,500 134,805 92,499 73,282 $520,000 $430,000 $360,000 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 Current Yr $676,000 $412,360 209,560 11,492 8,788 642,200 $ 33,800 1 Yr Ago $511,700 $332,605 129,460 11,769 7,676 481,510 $ 30,190 Earnings per share $ 2.08 $ 1.86 Additional information about the company follows. Common stock market price, December 31, Current Year $34.00 Common stock market price, December 31, 1 Year Ago 32.00 Annual cash dividends per share in Current Year 0.22 Annual cash dividends per share 1 Year Ago 0.11 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 % 1 Current Year: 1 1 Year Ago: 0 % Required 1 Required 2 > 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 price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earnings Ratio Choose Numerator: 1 Choose Denominator: Price-Earnings Ratio Price-earnings ratio 1 Current Year: / 0 1 Year Ago: 1 0
