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 $ 32,700 $ 37,849 $ 37,130 Accounts receivable, net 94,775 65,580 51,527 Merchandise inventory 120,330 86,659 53,800 Prepaid expenses 10,118 10,034 4,252 Plant assets, net 285,450 268,303 235,991 Total assets $ 543,373 $ 468,425 $ 382,700 Liabilities and Equity Accounts payable $ 138,006 $ 78,372 $ 51,022 Long-term notes payable 100,111 107,738 83,731 Common stock, $10 par value 163,500 163,500 162,500 Retained earnings 141,756 118,815 85,447 Total liabilities and equity $ 543,373 $ 468,425 $ 382,700 The company’s income statements for the current year and 1 year ago, follow. For Year Ended December 31 Current Year 1 Year Ago Sales $ 706,385 $ 557,426 Cost of goods sold $ 430,895 $ 362,327 Other operating expenses 218,979 141,029 Interest expense 12,009 12,821 Income tax expense 9,183 8,361 Total costs and expenses 671,066 524,538 Net income $ 35,319 $ 32,888 Earnings per share $ 2.17 $ 2.02 For both the Current Year and 1 Year Ago, compute the following ratios: (1-a) Profit margin ratio. (1-b) Did profit margin improve or worsen in the Current Year versus 1 Year Ago? (2) Total asset turnover. (3-a) Return on total assets. (3-b) Based on return on total assets, did Simon's operating efficiency improve or worsen in the Current Year versus 1 Year Ago? For both the current year and one year ago, compute the following ratios:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

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	$ 32,700	$ 37,849	$ 37,130
Accounts receivable, net	94,775	65,580	51,527
Merchandise inventory	120,330	86,659	53,800
Prepaid expenses	10,118	10,034	4,252
Plant assets, net	285,450	268,303	235,991
Total assets	$ 543,373	$ 468,425	$ 382,700
Liabilities and Equity
Accounts payable	$ 138,006	$ 78,372	$ 51,022
Long-term notes payable	100,111	107,738	83,731
Common stock, $10 par value	163,500	163,500	162,500
Retained earnings	141,756	118,815	85,447
Total liabilities and equity	$ 543,373	$ 468,425	$ 382,700

The company’s income statements for the current year and 1 year ago, follow.

For Year Ended December 31	Current Year	1 Year Ago
Sales		$ 706,385		$ 557,426
Cost of goods sold	$ 430,895		$ 362,327
Other operating expenses	218,979		141,029
Interest expense	12,009		12,821
Income tax expense	9,183		8,361
Total costs and expenses		671,066		524,538
Net income		$ 35,319		$ 32,888
Earnings per share		$ 2.17		$ 2.02

For both the Current Year and 1 Year Ago, compute the following ratios:

(1-a) Profit margin ratio.
(1-b) Did profit margin improve or worsen in the Current Year versus 1 Year Ago?

(2) Total asset turnover.

(3-a) Return on total assets.
(3-b) Based on return on total assets, did Simon's operating efficiency improve or worsen in the Current Year versus 1 Year Ago?

For both the current year and one year ago, compute the following ratios:

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 5 steps with 8 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions