For both the current year and one year ago, compute the following ratios: 1. Return on equity. 2. Dividend yield. 3a. Price-earnings ratio on December 31. 3b. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growt Complete this question
For both the current year and one year ago, compute the following ratios: 1. Return on equity. 2. Dividend yield. 3a. Price-earnings ratio on December 31. 3b. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growt Complete this question
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 50E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...
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![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
Assets
Cash
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Liabilities and Equity
Accounts payable
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
For Year Ended December 31
Sales
Cost of goods sold
Other operating expenses
Exercise 13-11 (Algo) Analyzing profitability LO P3
Interest expense
Income tax expense
Total costs and expenses
Net income
Earnings per share
For both the current year and one year ago, compute the following ratios:
Current Year
The company's income statements for the Current Year and 1 Year Ago, follow.
$ 460,312
233,929
12,828
9,810
$ 34,590
97,275
124,801
11,139
312,664
$ 580,469
$ 143,091
106,946
162,500
167,932
$ 580,469
Compute the price-earnings ratio for each year.
Note: Round your answers to 2 decimal places.
Current Year:
1 Year Ago:
Current Year
Required 1 Required 2 Required 3A Required 38
Numerator:
$ 754,610
1 Year Ago
716,879
$ 37,731
$ 2.32
Additional information about the company follows.
Common stock market price, December 31, Current Year
Common stock market price, December 31, 1 Year Ago
Annual cash dividends per share in Current Year
Annual cash dividends per share 1 Year Ago
For both the current year and one year ago, compute the following ratios:
1. Return on equity.
2. Dividend yield.
$ 40,833
68,655
94,426
10,403
286,087
$ 500,404
< Required 2
$ 84,568
115,093
162,500
138,243
$ 500,404
Complete this question by entering your answers in the tabs below.
Price-Earnings Ratio
$ 387,063
150,657
13,696
8,932
$ 30.00
28.00
0.38
0.19
3a. Price-earnings ratio on December 31.
3b. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growt
Denominator:
1 Year Ago
Required 3B >
2 Years Ago
E
$ 42,134
55,612
60,435
4,823
266,896
$ 429,900
=
$ 55,612
94,058
163,500
116,730
$ 429,900
$ 595,481
560,348
$ 35,133
$ 2.16
Price-Earnings Ratio
Price-earnings ratio
0
10](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fece9fcc4-2577-4cca-9d7d-242bb92cc585%2Faab51039-6249-43c4-b8a6-104b36a513cc%2Fzf8sizb_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
Assets
Cash
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Liabilities and Equity
Accounts payable
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
For Year Ended December 31
Sales
Cost of goods sold
Other operating expenses
Exercise 13-11 (Algo) Analyzing profitability LO P3
Interest expense
Income tax expense
Total costs and expenses
Net income
Earnings per share
For both the current year and one year ago, compute the following ratios:
Current Year
The company's income statements for the Current Year and 1 Year Ago, follow.
$ 460,312
233,929
12,828
9,810
$ 34,590
97,275
124,801
11,139
312,664
$ 580,469
$ 143,091
106,946
162,500
167,932
$ 580,469
Compute the price-earnings ratio for each year.
Note: Round your answers to 2 decimal places.
Current Year:
1 Year Ago:
Current Year
Required 1 Required 2 Required 3A Required 38
Numerator:
$ 754,610
1 Year Ago
716,879
$ 37,731
$ 2.32
Additional information about the company follows.
Common stock market price, December 31, Current Year
Common stock market price, December 31, 1 Year Ago
Annual cash dividends per share in Current Year
Annual cash dividends per share 1 Year Ago
For both the current year and one year ago, compute the following ratios:
1. Return on equity.
2. Dividend yield.
$ 40,833
68,655
94,426
10,403
286,087
$ 500,404
< Required 2
$ 84,568
115,093
162,500
138,243
$ 500,404
Complete this question by entering your answers in the tabs below.
Price-Earnings Ratio
$ 387,063
150,657
13,696
8,932
$ 30.00
28.00
0.38
0.19
3a. Price-earnings ratio on December 31.
3b. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growt
Denominator:
1 Year Ago
Required 3B >
2 Years Ago
E
$ 42,134
55,612
60,435
4,823
266,896
$ 429,900
=
$ 55,612
94,058
163,500
116,730
$ 429,900
$ 595,481
560,348
$ 35,133
$ 2.16
Price-Earnings Ratio
Price-earnings ratio
0
10
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