Simon Company's year-end balance sheets follow. Yr At December 31 Current 1 Yr Ago 2 Yrs Ago Assets Cash $ 31,900 $ 34,800 $ 37,100 Accounts receivable, net 88,300 63,300 57,400 Merchandise inventory 56,194 84,700 50, 300 Prepaid expenses 11,098 9,960 3,444 Plant assets, net 402,508 272, 240 161,756 Total assets $590,000 $465,000 $310,000 Liabilities and Equity Accounts payable $145,441 $ 80,157 $ 42,148 Long-term notes payable secured by mortgages on plant assets 110,920 104,811 67,825 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 171,139 117,532 37,527 Total liabilities and $ 590,000 $465,000 $310,000 equity The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Current Yr Sales $ 767,000 Cost of goods sold $ 467,870 Other operating 237,770 expenses Interest expense 13,039 Income tax expense 9,971 Total costs and 728,650 expenses Net income $ 38, 350 Earnings per share $ 2.36 1 Yr Ago $553, 350 $ 359,678 139,998 12,727 8,300 520, 703 $ 32,647 $ 2.01 Additional information about the company follows. Common stock market price, December 31, Current Year $28.00 Common stock market price, December 26.00 31, 1 Year Ago Annual cash dividends per share in 0.30 Current Year Annual cash dividends per share 1 Year 0.15 Ago 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: Choose Denominator: Return On Common Stockholders' Equity Roburn on cominon stockholders equity Current Year 1 Year Ago: 1 Required 2 > 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 aminos Ratio Choose Denominator Choose Numerator Price Camings Ratio Price-camings ratio Current Year 1 Year Agor 1 1 Required 1 Required 2a > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required za Required 3 Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growth? Which company has higher market expectations for future growth? Required 2 Required 3 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 20 Required 3 Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Dividend Yield Choose Numerator: Choose Denominator Dividend Yield Dividend yield % 1 1 1 Current Year 1 Year Ago % Required 2a Required
