Required information   [The following information applies to the questions displayed below.] Simon Company’s year-end balance sheets follow.  At December 31 2017 2016 2015 Assets                   Cash $ 31,800   $ 35,625   $ 37,800   Accounts receivable, net   89,500     62,500     50,200   Merchandise inventory   112,500     82,500     54,000   Prepaid expenses   10,700     9,375     5,000   Plant assets, net   278,500     255,000     230,500   Total assets $ 523,000   $ 445,000   $ 377,500   Liabilities and Equity                   Accounts payable $ 129,900   $ 75,250   $ 51,250   Long-term notes payable secured bymortgages on plant assets   98,500     101,500     83,500   Common stock, $10 par value   163,500     163,500     163,500   Retained earnings   131,100     104,750     79,250   Total liabilities and equity $ 523,000   $ 445,000   $ 377,500       The company’s income statements for the years ended December 31, 2017 and 2016, follow.  For Year Ended December 31 2017 2016 Sales       $ 673,500         $ 532,000   Cost of goods sold $ 411,225         $ 345,500         Other operating expenses   209,550           134,980         Interest expense   12,100           13,300         Income taxes   9,525           8,845         Total costs and expenses         642,400           502,625   Net income       $ 31,100         $ 29,375   Earnings per share       $ 1.90         $ 1.80       Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016.   (1) Profit margin ratio.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Required information

 

[The following information applies to the questions displayed below.]
 
Simon Company’s year-end balance sheets follow.
 

At December 31 2017 2016 2015
Assets                  
Cash $ 31,800   $ 35,625   $ 37,800  
Accounts receivable, net   89,500     62,500     50,200  
Merchandise inventory   112,500     82,500     54,000  
Prepaid expenses   10,700     9,375     5,000  
Plant assets, net   278,500     255,000     230,500  
Total assets $ 523,000   $ 445,000   $ 377,500  
Liabilities and Equity                  
Accounts payable $ 129,900   $ 75,250   $ 51,250  
Long-term notes payable secured by
mortgages on plant assets
  98,500     101,500     83,500  
Common stock, $10 par value   163,500     163,500     163,500  
Retained earnings   131,100     104,750     79,250  
Total liabilities and equity $ 523,000   $ 445,000   $ 377,500  
 

  
The company’s income statements for the years ended December 31, 2017 and 2016, follow.
 

For Year Ended December 31 2017 2016
Sales       $ 673,500         $ 532,000  
Cost of goods sold $ 411,225         $ 345,500        
Other operating expenses   209,550           134,980        
Interest expense   12,100           13,300        
Income taxes   9,525           8,845        
Total costs and expenses         642,400           502,625  
Net income       $ 31,100         $ 29,375  
Earnings per share       $ 1.90         $ 1.80  
 

  
Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016.

 

(1) Profit margin ratio.
 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
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
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education