Question

nment Required information (The following information applies to the questions displayed below Simon Company's year-end balance sheets follow. At Decenber 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by 2917 2016111122015เห 32,48035,e0 37,688 51,000 111,800 89,40 53,0e0 S,1ee 276,880 253,50 231,e8e $519,850 $449,300 $ 377, 7ee 89,700 62,800 10,750 9,400 $128, 880 72,5e8 se,280 mortgages on plant assets Conmon stock, $10 par value Retained earning:s Total liabilities and equity 95,580 101,758 82,680 162,808 162,808 162,800 133,558 184,95882,908 $519,858 448,зее 377, 7ee The company's income statements for the years ended December 31, 2017 and 2016, follow 2017 For Year Ended Decenber 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income 715,e8e 588,e0e $414, 786e 214,5ee 12,100 9,500 $371, 289 133,400 13,400 8,575 658, 8ee 64,28e $3.96 526,575 $ 53,425 S 3.30 Earnings per share Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016 Drofit marnin ratin < Prev s7ot 7 Next> ch 4 6

Answer 1

Ans.1	Profit margin = Net income / Net sales * 100
	2017	64200 / 715000 * 100		8.98%
	2016	53425 / 580000 * 100		9.21%
Ans.2	Assets turnover = Sales / Average total assets
	2017	715000 / 409000		1.75	times
	2016	580000 / 480075		1.21	times
	*Average total assets = (Beginning assets + Ending assets) / 2
	2017	(377700 + 440300) / 2		409000
	2016	(440300 + 519850) / 2		480075
Ans.3	Return on assets = Net income / Average total assets * 100
	2017	64200 / 409000 * 100		15.70%
	2016	53425 / 480075 * 100		11.13%