The companys income statements for the current year and 1 year ago, follow.
Required information Use the following information for the Exercises below. (Algo) (The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 26, 691 $ 29,963 $ 30,618 Accounts receivable, net 75.060 55,139 40,000 Merchandise inventory 94.374 70, 719 44, 804 Prepaid expenses 8.510 8. 109 3,402 Plant assets, net 243 271 222196 193 576 Total assets $ 447. 906 $ 386, 126 $ 312,400 Liabilities and Equity Accounts payable $ 108, 183 $ 66,560 $ 41,649 Long-term notos payable 85.890 88, 809 66, 969 Common stock. $10 par value 163. 500 163,500 162,500 Retained earnings 90 333 67.257 41 282 Total liabilities and equity $ 447,906 $ 386, 126 $ 312,400 For both the current year and one year ago, compute the following ratios: Exercise 17-11 (Algo) Analyzing profitability LO P3 The company's income statements for the Current Year and 1 Year Ago follow. For Year Ended December 31 Current Year 1 Year Ao Sales $ 582, 278 $ 459, 490 Cost of goods sold $ 355. 190 $ 298.669 Other operating expenses 180.506 116.251 Interest expense 9.899 10.568 Income tax expense 7.570 6.892 Total costs and expenses 553 165 432 380 Net inconte $ 29,113 $ 27. 110 Earnings per share $ 1.79 $ 1.67 Additional information about the company follows, Common stock market price, December 31. Qurrent Year $ 33.00 Common stock market price December 31. 1 year ago 31.00 Annual cash dividends per share in Current Year 0.26 Annual cash dividends per share 1 Year Ago 0.13 For both the current year and one year ago, compute the following ratios: 1. Return on equity 2. Dividend yield 3a. Price-earings ratio on December 31 3b. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growth? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 38 Compute the return on equity for each year. Return On Equity Numerator: Preferred dividends 1 Current Year: 1 1 Year Ago: 1 Denominator Return On Equity Return on equity % % Required Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 3 Compute the dividend yield for each year. (Round your answers to 2 decimal places.) Dividend Yield Numerator: Denominator: Current Year 1 Year Ago Dividend Yield Dividend yield % % Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 38 Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earnings Ratio Numerator: Denominator: Price-Earnings Ratio Price-earnings ratio Current Year: 1 Year Ago: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 38 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?
