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. 3a. Price-earnings ratio on December 31. 3b. Assuming Simon's competitor has a price-earnings ratio of 6, which company has higher market expectations for future growth? $32.00 30.00 0.28 0.14

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
$ 35,467
102,794
127,925
11,888
335,329
$ 613,403
For both the current year and one year ago, compute the following ratios:
ه له مه له :. .: له
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
$ 149,683
117,626
162,500
183,594
$ 613,403
$ 486,429
247,201
Current Year
13,556
10,367
Vanu
$ 797,424
Earnings per share
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
Ammin1
1 Year Ago 2 Years Ago
$ 42,304
74,031
95,871
11,327
305,263
$ 528,796
757, 553
$ 39,871
$ 2.45
$ 88,473
125,272
162,500
152, 551
$ 528,796
$ 409,024
159, 205
14,473
9,439
$ 43,194
57,592
$ 32.00
30.00
0.28
11
63, 194
4,751
267,569
$ 436,300
1 Year Ago
$ 57,016
94,494
163,500
121,290
$ 436,300
$ 629,267
592,141
$ 37, 126
$ 2.28
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 $ 35,467 102,794 127,925 11,888 335,329 $ 613,403 For both the current year and one year ago, compute the following ratios: ه له مه له :. .: له 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 $ 149,683 117,626 162,500 183,594 $ 613,403 $ 486,429 247,201 Current Year 13,556 10,367 Vanu $ 797,424 Earnings per share 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 Ammin1 1 Year Ago 2 Years Ago $ 42,304 74,031 95,871 11,327 305,263 $ 528,796 757, 553 $ 39,871 $ 2.45 $ 88,473 125,272 162,500 152, 551 $ 528,796 $ 409,024 159, 205 14,473 9,439 $ 43,194 57,592 $ 32.00 30.00 0.28 11 63, 194 4,751 267,569 $ 436,300 1 Year Ago $ 57,016 94,494 163,500 121,290 $ 436,300 $ 629,267 592,141 $ 37, 126 $ 2.28
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.
3a. Price-earnings ratio on December 31.
3b. Assuming Simon's competitor has a price-earnings ratio of 6, which company has higher market expectations for future growth?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3A Required 3B
$ 32.00
30.00
0.28
0.14
Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.)
Price-Earnings Ratio
Current Year:
1 Year Ago:
Numerator:
< Required 2
Denominator:
Required 3B
>
=
=
=
=
Price-Earnings Ratio
Price-earnings ratio
0
0
Transcribed Image Text: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. 3a. Price-earnings ratio on December 31. 3b. Assuming Simon's competitor has a price-earnings ratio of 6, which company has higher market expectations for future growth? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 3B $ 32.00 30.00 0.28 0.14 Compute the price-earnings ratio for each year. (Round your answers to 2 decimal places.) Price-Earnings Ratio Current Year: 1 Year Ago: Numerator: < Required 2 Denominator: Required 3B > = = = = Price-Earnings Ratio Price-earnings ratio 0 0
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