Required Information [The following Information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Current Year 1 Year Ago 2 Years Ago Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable $ 596,250 $ 151,436 Long-term notes payable 110,974 Common stock, $10 par value 162,500 Retained earnings 171,340 Total liabilities and equity $ 596,250 $ 514,009 $ 34,475 101,959 130,758 11,329 317,729 $ 42,354 70,522 96,043 11,118 293,972 $ 514,009 $ 86,868 118,222 162,500 146,419 $ 41,986 56,541 60,824 4,758 259,991 $ 424,100 $ 54,862 91,852 162,500 114,886 $ 424,100 For both the current year and one year ago, compute the following ratios: 1 Year Ago $ 611,671 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 Interest expense Income tax expense Current Year $775,125 $ 472,826 240,289 13,177 10,077 $ 397,586 154,753 14,068 9,175 Total costs and expenses Net income Earnings per share 736,369 $ 38,756 2.38 575,582 $ 36,089 $ 2.22 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?
Required Information [The following Information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Current Year 1 Year Ago 2 Years Ago Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable $ 596,250 $ 151,436 Long-term notes payable 110,974 Common stock, $10 par value 162,500 Retained earnings 171,340 Total liabilities and equity $ 596,250 $ 514,009 $ 34,475 101,959 130,758 11,329 317,729 $ 42,354 70,522 96,043 11,118 293,972 $ 514,009 $ 86,868 118,222 162,500 146,419 $ 41,986 56,541 60,824 4,758 259,991 $ 424,100 $ 54,862 91,852 162,500 114,886 $ 424,100 For both the current year and one year ago, compute the following ratios: 1 Year Ago $ 611,671 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 Interest expense Income tax expense Current Year $775,125 $ 472,826 240,289 13,177 10,077 $ 397,586 154,753 14,068 9,175 Total costs and expenses Net income Earnings per share 736,369 $ 38,756 2.38 575,582 $ 36,089 $ 2.22 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Required 1A Required 1B
Required 2
Required 3A
Required 3B
Compute profit margin ratio for the current year and one year ago.
Numerator:
Profit Margin Ratio
Denominator:
Current Year:
1 Year Ago:
Accounts receivables, net
Average accounts receivable, net
ed 1A
Required 1B >
Cost of goods sold
Current assets
Current liabilities
Profit Margin Ratio
= Profit margin ratio
=
=
%
%
![Required Information
[The following Information applies to the questions displayed below.]
Simon Company's year-end balance sheets follow.
At December 31
Assets
Current Year
1 Year Ago
2 Years Ago
Cash
$ 34,475
Accounts receivable, net
101,959
$ 42,354
70,522
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Liabilities and Equity
Accounts payable
130,758
11,329
317,729
$ 596,250
110,974
162,500
171,340
96,043
11,118
293,972
$ 514,009
$ 86,868
118,222
162,500
146,419
$ 596,250
$ 514,009
$ 41,986
56,541
60,824
4,758
259,991
$ 424,100
$ 54,862
91,852
162,500
114,886
$ 424,100
$ 151,436
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
For both the current year and one year ago, compute the following ratios:
The company's Income statements for the current year and 1 year ago, follow.
For Year Ended December 31
Sales
Cost of goods sold
Interest expense
Income tax expense
Other operating expenses
Total costs and expenses
Net income
Current Year
1 Year Ago
$ 775,125
$ 611,671
$ 472,826
240,289
13,177
10,077
$ 397,586
154,753
14,068
9,175
736,369
575,582
Earnings per share
$ 38,756
$ 2.38
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.
$ 36,089
$ 2.22
(3-b) Based on return on total assets, did Simon's operating efficiency Improve or worsen in the Current Year versus 1 Year Ago?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F71da004f-23dc-47ac-9c54-84cf84b3724a%2Fcc1dcb3c-2776-4aae-b28c-332514f28d19%2Fyiawrmc_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following Information applies to the questions displayed below.]
Simon Company's year-end balance sheets follow.
At December 31
Assets
Current Year
1 Year Ago
2 Years Ago
Cash
$ 34,475
Accounts receivable, net
101,959
$ 42,354
70,522
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Liabilities and Equity
Accounts payable
130,758
11,329
317,729
$ 596,250
110,974
162,500
171,340
96,043
11,118
293,972
$ 514,009
$ 86,868
118,222
162,500
146,419
$ 596,250
$ 514,009
$ 41,986
56,541
60,824
4,758
259,991
$ 424,100
$ 54,862
91,852
162,500
114,886
$ 424,100
$ 151,436
Long-term notes payable
Common stock, $10 par value
Retained earnings
Total liabilities and equity
For both the current year and one year ago, compute the following ratios:
The company's Income statements for the current year and 1 year ago, follow.
For Year Ended December 31
Sales
Cost of goods sold
Interest expense
Income tax expense
Other operating expenses
Total costs and expenses
Net income
Current Year
1 Year Ago
$ 775,125
$ 611,671
$ 472,826
240,289
13,177
10,077
$ 397,586
154,753
14,068
9,175
736,369
575,582
Earnings per share
$ 38,756
$ 2.38
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.
$ 36,089
$ 2.22
(3-b) Based on return on total assets, did Simon's operating efficiency Improve or worsen in the Current Year versus 1 Year Ago?
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