[The following information applies to the questions displayed below.]Simon Company's year-end balance sheets follow.At December 31AssetsCashAccounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, netTotal assetsCurrent Year$ 27,97080, 264100,9179,097251,134$ 469,382Income tax expenseTotal costs and expensesNet incomeLiabilities and EquityAccounts payableLong-term notes payableCommon stock, $10 par valueRetained earningsTotal liabilities and equityFor both the current year and one year ago, compute the following ratios:$ 116,87690,891163,50098,115$ 469,382$ 372,220189,16110,3737,933The company's income statements for the current year and 1 year ago, follow.For Year Ended December 31SalesCost of goods soldOther operating expensesInterest expenseCurrent Year1 Year Ago$ 31,40058, 34977,1048,412229,375$ 404,640Exercise 13-10 (Algo) Analyzing efficiency and profitability LO P3$ 610,197$ 70,43692,137163,50078,567$ 404, 640579,687$ 30,510$ 1.882 Years Ago$ 33,71745,40148,3613,635206,086$ 337,200$ 312,989121,82511,0757,223Earnings per shareFor both the Current Year and 1 Year Ago, compute the following ratios:$ 45,84673,776163,50054,078$ 337,2001 Year Ago$ 481,522453,112$ 28,410$ 1.75 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?Complete this question by entering your answers in the tabs below.Required 1A Required 1B Required 2 Required 3A Required 3BCompute profit margin ratio for the current year and one year ago.Profit Margin RatioI77Current Year:1 Year Ago:Numerator:Denominator:= Profit Margin RatioProfit margin ratio===%

Solution:-1a Calculation of profit margin as follows under:- Profit margin =Net profit/sales x 100

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. (2) Roturn on total accots

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. (2) Roturn on total accots

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 18BEA

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