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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?

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
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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 = = % %
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?
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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