(The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. 2017 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses plant assets, not Total asset 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 $ 35,127 $ 41,060 $ 41,513 89,900 62.900 59,400 112.500 83,500 58.000 11,312 10, 778 4,613 334,857 304,948 247,574 $ 583,696 503,186 $ 411,100 $ 148,247 86,739 $ 55,351 111,90 138,047 92,670 162,500 162,500 162,500 161,019 135,900 100.570 $ 503,696 503,186 $ 411,100 The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit: Yor Year Unded December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total cost and expenses Net Income Earnings per where 2017 $.758,805 $.462.821 235,230 12.900 9,864 720, 865 $ 37,940 $ 2.33 2016 $ 598,792 $ 389,214 151, 494 13,772 8.982 563,462 $ 35,329 2.17 Exercise 17-8 Part 3 (3) Compute inventory turnover. Inventory Turnover Choose Denominator: Choose Numerator: Inventory Turnover Inventory turnover times 1 2017: 11 2016: times Simon Company's year-end balance sheets follow. 2017 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plantensets, not Total assets Lisbilities and Equity Accounts payable Tong-term notes payable secured by mortgages on plant annet Common stock, $10 par value Retained earnings Total liabilities and equity $ 35,127 5 41,060 $ 41,513 89.900 62,900 59,400 112,500 83,500 58,000 11,312 10,778 4,613 334,857 304.949 247.574 $583,696 $ 503,186 5 411,100 $149,247 $ 86,739 $ 55,351 111,930 118,047 92,670 162,500 162.500 162,500 161,019 135, 900 100.579 $ 583,696 $ 503,186 411,100 The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit: Yor Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxe Total costs and expenses Net Income Earnings per share 2017 $ 758,805 $ 462,871 235,230 12,900 9.864 720.865 37.940 2.33 2016 5598,791 6389,214 151, 494 13,272 3982 563462 $35.329 2:17 Exercise 17-8 Part 4 (4) Compute days' sales in inventory. Days' Sales In Inventory Choose Denominator: Choose Numerator: Days 1 1 Days' Sales In Inventory Days' sales in inventory o days 2017: X 2016; X 0 days 2017 2016 2015 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 $ 31,400 $ 36,250 $ 38,600 87,100 63,500 49,500 111,000 80,000 53,500 10, 250 9,500 4,600 278,000 249,500 230,000 $517,750 $438,750 $376,200 $130,000 $ 75,750 $ 51,400 97,500 99,250 82,200 161,000 161,000 161,000 129,250 102.750 81,600 $517,750 $438,750 $376,200 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 $715,000 $421,850 214,500 11,600 9,550 657,500 $ 57,500 $ 3.57 2016 $ 600,000 $378,000 144,000 13,500 8,550 544,050 $ 55,950 $ 3.48 Exercise 17-10 Part 1 (1) Profit margin ratio. Choose Numerator: Profit Margin Ratio Choose Denominator: 1 V 1 = Profit Margin Ratio Profit margin ratio % 2017 2016 Simon Company's year-end balance sheets follow. 2017 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assetis 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 $ 31,400 $ 36,250 $ 38,600 87,100 63,500 49,500 111,000 80,000 53,500 10,250 9,500 4,600 278,000 249,500 230,000 $517,750 $438,750 $376,200 $130,000 $. 75,750 $ 51,400 97,500 99,250 82,200 161,000 161,000 161,000 129.250 102,750 81,600 $517,750 $438,750 $376,200 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 $715,000 $421,850 214,500 11,600 9,550 657, 500 $ 57,500 2016 $ 600,000 $378,000 144,000 13,500 8,550 544,050 $ 55,950 $ 3.52 $ 3.48 Exercise 17-10 Part 2 (2) Total asset turnover. Choose Numerator: Total Asset Turnover 1 Choose Denominator: 1 11 Total Asset Turnover Total asset turnover times 2017 11 2016 = times 2017 2016 2015 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 $ 31,400 $ 36,250 $ 38,600 87,100 63,500 49,500 111,000 80,000 53,500 10,250 9,500 4,600 278,000 249,500 230,000 $517,750 $438,750 $376,200 $130,000 $ 75,750 $ 51,400 97,500 99,250 82,200 161,000 161,000 161,000 129,250 102,750 81,600 $517,750 $438,750 $376,200 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 $715,000 $421,850 214,500 11,600 9,550 657,500 $ 57,500 2016 $ 600,000 $378,000 144,000 13,500 8,550 544,050 $ 55,950 $ 3.57 3.48 Exercise 17-10 Part 3 (3) Return on total assets. Choose Numerator: Return On Total Assets 1 Choose Denominator: 2017 Return On Total Assets Return on total assets % % 2016