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 Interest expense Income tax expense Total costs and expenses Net income Current Year $ 34,089 89,700 113,500 10,978 335,350 $ 583,617 Earnings per share $ 143,867 108,623 162,500 168,627 $ 583,617 Current Year 1 Year Ago $ 39,847 62,800 83,000 10,460 307,011 $ 503,118 The company’s income statements for the current year and one year ago follow. Assume that all sales are on credit: $ 462,808 235, 198 12,898 9,863 $ 84,177 114,560 162,500 141,881 $ 503,118 $ 758,702 720,767 $ 37,935 $ 2.33 2 Years Ago $ 41,507 50, 100 60,000 4,612 267,281 $ 423,500 (4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year, $ 55,343 92,658 162,500 112,999 $ 423,500 1 Year Ago $ 389,162 151,474 13,770 8,981 $ 598,710 563,387 $ 35,323 $ 2.17

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Chapter1: Financial Statements And Business Decisions
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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
Current Year
$ 34,089
89,700
113,500
10,978
335,350
$ 583,617
Interest expense
Income tax expense
Total costs and expenses
Net income
Earnings per share
$ 143,867
108,623
$ 84,177
114,560
162,500
162,500
168,627
141,881
$ 583,617 $ 503,118
1 Year Ago
$ 39,847
62,800
83,000
10, 460
307,011
$ 503,118
Current Year
The company’s income statements for the current year and one year ago follow. Assume that all sales are on
credit:
$ 462,808
235, 198
12,898
9,863
$758,702
720,767
$ 37,935
$ 2.33
2 Years Ago
$ 41,507
50, 100
60,000
4,612
267,281
$ 423,500
$ 55,343
92,658
(4-a) Compute days' sales in inventory.
(4-b) For each ratio, determine if it improved or worsened in the current year.
162,500
112,999
$ 423,500
1 Year Ago
$ 389,162
151,474
13,770
8,981
$ 598,710
563,387
$ 35,323
$ 2.17
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 For Year Ended December 31 Sales Cost of goods sold Other operating expenses Current Year $ 34,089 89,700 113,500 10,978 335,350 $ 583,617 Interest expense Income tax expense Total costs and expenses Net income Earnings per share $ 143,867 108,623 $ 84,177 114,560 162,500 162,500 168,627 141,881 $ 583,617 $ 503,118 1 Year Ago $ 39,847 62,800 83,000 10, 460 307,011 $ 503,118 Current Year The company’s income statements for the current year and one year ago follow. Assume that all sales are on credit: $ 462,808 235, 198 12,898 9,863 $758,702 720,767 $ 37,935 $ 2.33 2 Years Ago $ 41,507 50, 100 60,000 4,612 267,281 $ 423,500 $ 55,343 92,658 (4-a) Compute days' sales in inventory. (4-b) For each ratio, determine if it improved or worsened in the current year. 162,500 112,999 $ 423,500 1 Year Ago $ 389,162 151,474 13,770 8,981 $ 598,710 563,387 $ 35,323 $ 2.17
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