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 Current Year For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income $ 31,800 89,500 112,500 10,700 278,500 $ 523,000 $ 129,900 98,500 163,500 131,100 $ 523,000 1 Year Ago $ 35,625 62,500 82,500 Current Year $ 411,225 209,550 12,100 9,525 9,375 255,000 $ 445,000 $ 75,250 101,500 163,500 104,750 $ 445,000 The company's income statements for the current year and 1 year ago, follow. $ 673,500 2 Years Ago 642,400 $ 31,100 $ 1.90 $ 37,800 50,200 54,000 5,000 230,500 $ 377,500 $ 51,250 83,500 163,500 79,250 $ 377,500 1 Year Ago $ 345,500 134,980 13,300 8,845 $ 532,000 $ 30.00 28.00 0.29 0.24 502,625 $ 29,375 $ 1.80 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 Annual cash dividends per share 1 Year Ago For both the current year and one year ago, compute the following ratios: 1. Return on common stockholders' equity. 2. Dividend yield. 3. Price-earnings ratio on December 31. 3a. Assuming Simon's competitor has a price-earnings ratio of 10, which company has higher market expectations for future growth?
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 Current Year For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income $ 31,800 89,500 112,500 10,700 278,500 $ 523,000 $ 129,900 98,500 163,500 131,100 $ 523,000 1 Year Ago $ 35,625 62,500 82,500 Current Year $ 411,225 209,550 12,100 9,525 9,375 255,000 $ 445,000 $ 75,250 101,500 163,500 104,750 $ 445,000 The company's income statements for the current year and 1 year ago, follow. $ 673,500 2 Years Ago 642,400 $ 31,100 $ 1.90 $ 37,800 50,200 54,000 5,000 230,500 $ 377,500 $ 51,250 83,500 163,500 79,250 $ 377,500 1 Year Ago $ 345,500 134,980 13,300 8,845 $ 532,000 $ 30.00 28.00 0.29 0.24 502,625 $ 29,375 $ 1.80 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 Annual cash dividends per share 1 Year Ago For both the current year and one year ago, compute the following ratios: 1. Return on common stockholders' equity. 2. Dividend yield. 3. Price-earnings ratio on December 31. 3a. Assuming Simon's competitor has a price-earnings ratio of 10, which company has higher market expectations for future growth?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Current Year
1 Year Ago
Compute the return on common stockholders' equity for each year.
Required 3
Current Year:
1 Year Ago:
Required 3a
Choose Numerator:
Required 1 Required 2 Required 3 Required 3a
Return On Common Stockholders' Equity.
Choose Denominator:
Compute the dividend yield for each year.
Note: Round your answers to 2 decimal places.
Complete this question by entering your answers in the tabs below.
Choose Numerator:
Current Year:
1 Year Ago:
Choose Numerator:
Dividend Yield
Compute the price-earnings ratio for each year.
Note: Round your answers to 2 decimal places.
1
1
< Required 1
Required 1 Required 2 Required 3 Required 3a
< Required 1
/Choose Denominator:
Complete this question by entering your answers in the tabs below.
1
/
1
1
1
Price-Earnings Ratio
Required 3 Required 3a
< Required 2
/Choose Denominator:
Required 3 >
Complete this question by entering your answers in the tabs below.
Required 2 >
=
=
=
Required 3a >
=
Competitor Company
Simon Company
Dividend Yield
Dividend yield
%
%
Price-Earnings Ratio
Price-earnings ratio
Required 1 Required 2
Assuming Simon's competitor has a price-earnings ratio of 10, which company has higher market expectations for future
growth?
Which company has higher market expectations for future growth?
< Required 3
Return On Common
Stockholders' Equity
Return on common
stockholders' equity
%
%
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
Current Year
For Year Ended December 31
Sales
Cost of goods sold
Other operating expenses
$ 31,800
89,500
112,500
10,700
278,500
$ 523,000
$ 129,900
98,500
163,500
131,100
$ 523,000
1 Year Ago
Current Year
$ 411,225
209,550
12,100
9,525
$ 35,625
62,500
82,500
9,375
255,000
$ 445,000
$75,250
101,500
163,500
104,750
$ 445,000
The company's income statements for the current year and 1 year ago, follow.
$ 673,500
2 Years Ago
$ 37,800
50,200
54,000
5,000
230,500
$ 377,500
642,400
$ 31,100
$ 1.90
$ 51,250
83,500
163,500
79,250
$ 377,500
Interest expense
Income tax expense
Total costs and expenses
Net income
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
Annual cash dividends per share 1 Year Ago
For both the current year and one year ago, compute the following ratios:
1. Return on common stockholders' equity.
2. Dividend yield.
1 Year Ago
$ 345,500
134,980
13,300
8,845
$30.00
28.00
0.29
0.24
$ 532,000
502,625
$ 29,375
$ 1.80
3. Price-earnings ratio on December 31.
3a. Assuming Simon's competitor has a price-earnings ratio of 10, which company has higher market expectations for future growth?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education