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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
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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