Question
[The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years
[The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow.
At December 31 | Current Year | 1 Year Ago | 2 Years Ago |
---|---|---|---|
Assets | |||
Cash | $ 33,316 | $ 38,944 | $ 40,566 |
Accounts receivable, net | 89,400 | 62,100 | 50,500 |
Merchandise inventory | 112,500 | 83,500 | 51,000 |
Prepaid expenses | 10,729 | 10,223 | 4,507 |
Plant assets, net | 324,442 | 296,946 | 267,327 |
Total assets | $ 570,387 | $ 491,713 | $ 413,900 |
Liabilities and Equity | |||
Accounts payable | $ 140,606 | $ 82,269 | $ 54,088 |
Long-term notes payable | 106,160 | 111,963 | 90,557 |
Common stock, $10 par value | 162,500 | 162,500 | 162,500 |
Retained earnings | 161,121 | 134,981 | 106,755 |
Total liabilities and equity | $ 570,387 | $ 491,713 | $ 413,900 |
The companys income statements for the current year and one year ago follow. Assume that all sales are on credit:
For Year Ended December 31 | Current Year | 1 Year Ago | ||
---|---|---|---|---|
Sales | $ 741,503 | $ 585,138 | ||
Cost of goods sold | $ 452,317 | $ 380,340 | ||
Other operating expenses | 229,866 | 148,040 | ||
Interest expense | 12,606 | 13,458 | ||
Income tax expense | 9,640 | 8,777 | ||
Total costs and expenses | 704,429 | 550,615 | ||
Net income | $ 37,074 | $ 34,523 | ||
Earnings per share | $ 2.28 | $ 2.12 |
(1-a) Compute days' sales uncollected. (1-b) For each ratio, determine if it improved or worsened in the current year.
(2-a) Compute accounts receivable turnover. (2-b) For each ratio, determine if it improved or worsened in the current year.
(3-a) Compute inventory turnover. (3-b) For each ratio, determine if it improved or worsened in the current year.
(4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year.
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