Simon Company's year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 32,700 $ 37,849 $ 37,130 Accounts receivable, net 94,775 65,580 51,527 Merchandise inventory 120,330 86,659 53,800 Prepaid expenses 10,118 10,034 4,252 Plant assets, net 285,450 268,303 235,991 Total assets $ 543,373 $ 468,425 $ 382,700 Liabilities and Equity Accounts payable $ 138,006 $ 78,372 $ 51,022 Long-term notes payable 100,111 107,738 83,731 Common stock, $10 par value 163,500 163,500 162,500 Retained earnings 141,756 118,815 85,447 Total liabilities and equity $ 543,373 $ 468,425 $ 382,700 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 Current Year 1 Year Ago Sales $ 706,385 $ 557,426 Cost of goods sold $ 430,895 $ 362,327 Other operating expenses 218,979 141,029 Interest expense 12,009 12,821 Income tax expense 9,183 8,361 Total costs and expenses 671,066 524,538 Net income $ 35,319 $ 32,888 Earnings per share $ 2.17 $ 2.02 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?
Simon Company's year-end
|
At December 31 |
Current Year |
1 Year Ago |
2 Years Ago |
|
Assets |
|
|
|
|
Cash |
$ 32,700 |
$ 37,849 |
$ 37,130 |
|
|
94,775 |
65,580 |
51,527 |
|
Merchandise inventory |
120,330 |
86,659 |
53,800 |
|
Prepaid expenses |
10,118 |
10,034 |
4,252 |
|
Plant assets, net |
285,450 |
268,303 |
235,991 |
|
Total assets |
$ 543,373 |
$ 468,425 |
$ 382,700 |
|
Liabilities and Equity |
|
|
|
|
Accounts payable |
$ 138,006 |
$ 78,372 |
$ 51,022 |
|
Long-term notes payable |
100,111 |
107,738 |
83,731 |
|
Common stock, $10 par value |
163,500 |
163,500 |
162,500 |
|
|
141,756 |
118,815 |
85,447 |
|
Total liabilities and equity |
$ 543,373 |
$ 468,425 |
$ 382,700 |
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 |
Current Year |
1 Year Ago |
||
|
Sales |
|
$ 706,385 |
|
$ 557,426 |
|
Cost of goods sold |
$ 430,895 |
|
$ 362,327 |
|
|
Other operating expenses |
218,979 |
|
141,029 |
|
|
Interest expense |
12,009 |
|
12,821 |
|
|
Income tax expense |
9,183 |
|
8,361 |
|
|
Total costs and expenses |
|
671,066 |
|
524,538 |
|
Net income |
|
$ 35,319 |
|
$ 32,888 |
|
Earnings per share |
|
$ 2.17 |
|
$ 2.02 |
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?
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