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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 Current Year 1 Year Ago $ 34,600 $ 32,000 88,300 63,500 72,207 82,900 9,757 10,063 332,430 269,243 $ 535,000 $ 460,000 2 Years Ago $36,100 56,900 54,700 4,222 228,078 $ 380,000

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 Current Year 1 Year Ago $ 34,600 $ 32,000 88,300 63,500 72,207 82,900 9,757 10,063 332,430 269,243 $ 535,000 $ 460,000 2 Years Ago $36,100 56,900 54,700 4,222 228,078 $ 380,000

Managerial Accounting: The Cornerstone of Business Decision-Making
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 40E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...
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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 Interest expense Income tax expense Total costs and expenses Net income Current Year Earnings per share $ 32,000 88,300 72,207 10,063 332,430 $ 535,000 $ 134,547 101,586 162,500 136,367 $ 535,000 Current Year 1 Year Ago 2 Years Ago $ 424,255 215,605 11,824 9,042 $ 34,600 63,500 82,900 9,757 269,243 $ 460,000 The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses $ 77,740 104,742 162,500 115,018 $ 460,000 $ 695,500 660,726 $ 34,774 $ 2.14 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: $36,100 56,900 54,700 4,222 228,078 $ 380,000 $ 48,655 86,499 162,500 82,346 $ 380,000 $ 355,810 138,492 12,590 8,211 1 Year Ago $31.00 29.00 0.32 0.16 $ 547,400 515,103 $ 32,297 $ 1.99
Transcribed Image Text: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 Interest expense Income tax expense Total costs and expenses Net income Current Year Earnings per share $ 32,000 88,300 72,207 10,063 332,430 $ 535,000 $ 134,547 101,586 162,500 136,367 $ 535,000 Current Year 1 Year Ago 2 Years Ago $ 424,255 215,605 11,824 9,042 $ 34,600 63,500 82,900 9,757 269,243 $ 460,000 The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses $ 77,740 104,742 162,500 115,018 $ 460,000 $ 695,500 660,726 $ 34,774 $ 2.14 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: $36,100 56,900 54,700 4,222 228,078 $ 380,000 $ 48,655 86,499 162,500 82,346 $ 380,000 $ 355,810 138,492 12,590 8,211 1 Year Ago $31.00 29.00 0.32 0.16 $ 547,400 515,103 $ 32,297 $ 1.99
For both the current year and one year ago, compute the following ratios: 1. Return on common stockholders' equity. 2. Dividend yield. 3. Price-earnings ratio on December 31. 3a. Assuming Simon's competitor has a price-earnings ratio of 8, which company has higher market expectations for fut Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 3a Compute the return on common stockholders' equity for each year. Current Year: 1 Year Ago: Net income $ $ Choose Numerator: 34,774 32,297 1 Return On Common Stockholders' Equity - Preferred dividends /Choose Denominator: Average common stockholders' equity 1 0/ 0/ < Required 1 $ 11 535,000 = Required 2 > || Return On Common Stockholders' Equity Return on common stockholders' equity 6.5 % 0%
Transcribed Image Text:For both the current year and one year ago, compute the following ratios: 1. Return on common stockholders' equity. 2. Dividend yield. 3. Price-earnings ratio on December 31. 3a. Assuming Simon's competitor has a price-earnings ratio of 8, which company has higher market expectations for fut Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 3a Compute the return on common stockholders' equity for each year. Current Year: 1 Year Ago: Net income $ $ Choose Numerator: 34,774 32,297 1 Return On Common Stockholders' Equity - Preferred dividends /Choose Denominator: Average common stockholders' equity 1 0/ 0/ < Required 1 $ 11 535,000 = Required 2 > || Return On Common Stockholders' Equity Return on common stockholders' equity 6.5 % 0%
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