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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 Current Year: 1 Year Ago: Liabilities and Equity Accounts payable 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: Required 1 Required 2 Required 3A Required 38 Compute the return on equity for each year. Return On Equity $ $ Numerator: Net income Current Year $ 34,542 101,104 128,366 11,344 304, 305 $ 579,661 1 37,678/ 35,085/ 1 Year Ago $ 41,176 69,959 90,597 10,389 287,587 $ 499,788 $ 140,006 110,066 163,5ee $ 84,451 112,634 163,500 166,089 139,123 $ 579,661 $ 499,708 Denominator: Average total equity 2 Years Ago $ 41,634 56,056 58,547 4,626 251,437 $ 412,300 "" $ 54,968 92,941 162,500 101,891 $ 412,300 Return On Equity Return on equity 0 % 0 %

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 Current Year: 1 Year Ago: Liabilities and Equity Accounts payable 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: Required 1 Required 2 Required 3A Required 38 Compute the return on equity for each year. Return On Equity $ $ Numerator: Net income Current Year $ 34,542 101,104 128,366 11,344 304, 305 $ 579,661 1 37,678/ 35,085/ 1 Year Ago $ 41,176 69,959 90,597 10,389 287,587 $ 499,788 $ 140,006 110,066 163,5ee $ 84,451 112,634 163,500 166,089 139,123 $ 579,661 $ 499,708 Denominator: Average total equity 2 Years Ago $ 41,634 56,056 58,547 4,626 251,437 $ 412,300 "" $ 54,968 92,941 162,500 101,891 $ 412,300 Return On Equity Return on equity 0 % 0 %

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Need help computing returning on equity, dividend yield and Price Earnings Ratio:
Transcribed Image Text:Need help computing returning on equity, dividend yield and Price Earnings Ratio:
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 Compute the return on equity for each year. Return On Equity Required 1 Required 2 Required 3A Required 3B Current Year: 1 Year Ago: Liabilities and Equity Accounts payable 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: $ $ Numerator: Net income Current Year $ 34,542 101, 104 128,366 11,344 384,385 $ 579,661 1 37,678/ 35,085 / $ 140,006 110,066 163,500 166,089 $ 579,661 1 Year Ago $ 41,176 69,959 90,597 10,389 287,587 $ 499,708 Denominator: $ 84,451 112,634 163,500 139,123 $ 499,708 Average total equity 2 Years Ago $ 41,634 56,056 58,547 = 4,626 251,437 $ 412,300 $ 54,968 92,941 162,500 101,891 $ 412,300 Return On Equity Return on equity 0 % 0 %
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 Compute the return on equity for each year. Return On Equity Required 1 Required 2 Required 3A Required 3B Current Year: 1 Year Ago: Liabilities and Equity Accounts payable 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: $ $ Numerator: Net income Current Year $ 34,542 101, 104 128,366 11,344 384,385 $ 579,661 1 37,678/ 35,085 / $ 140,006 110,066 163,500 166,089 $ 579,661 1 Year Ago $ 41,176 69,959 90,597 10,389 287,587 $ 499,708 Denominator: $ 84,451 112,634 163,500 139,123 $ 499,708 Average total equity 2 Years Ago $ 41,634 56,056 58,547 = 4,626 251,437 $ 412,300 $ 54,968 92,941 162,500 101,891 $ 412,300 Return On Equity Return on equity 0 % 0 %
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