Question

# Simon Company’s year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs...

Simon Company’s year-end balance sheets follow.

 At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash \$ 30,400 \$ 35,750 \$ 37,800 Accounts receivable, net 89,700 63,500 50,500 Merchandise inventory 112,000 82,000 53,000 Prepaid expenses 10,850 9,300 4,700 Plant assets, net 278,000 256,500 227,000 Total assets \$ 520,950 \$ 447,050 \$ 373,000 Liabilities and Equity Accounts payable \$ 129,200 \$ 74,500 \$ 50,800 Long-term notes payable secured by mortgages on plant assets 95,500 101,750 81,600 Common stock, \$10 par value 163,000 163,000 163,000 Retained earnings 133,250 107,800 77,600 Total liabilities and equity \$ 520,950 \$ 447,050 \$ 373,000

The company’s income statements for the Current Year and 1 Year Ago, follow.

 For Year Ended December 31 Current Yr 1 Yr Ago Sales \$ 745,000 \$ 600,000 Cost of goods sold \$ 461,900 \$ 372,000 Other operating expenses 230,950 144,000 Interest expense 11,500 13,200 Income tax expense 9,450 8,825 Total costs and expenses 713,800 538,025 Net income \$ 31,200 \$ 61,975 Earnings per share \$ 1.91 \$ 3.80

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?

Profit margin ratio.

 Profit Margin Ratio Choose Numerator: / Choose Denominator: = Profit Margin Ratio / = Profit margin ratio Current Year: / = % 1 Year Ago: / = %

Total asset turnover.

 Total Asset Turnover Choose Numerator: / Choose Denominator: = Total Asset Turnover / = Total asset turnover Current Year: / = times 1 Year Ago: / = times

Return on total assets

 Return On Total Assets Choose Numerator: / Choose Denominator: = Return On Total Assets / = Return on total assets Current Year: / = % 1 Year Ago: / = %

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