Question

Simon Company's year-end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs Ago $ 31,300 $ 35,000 $ 37,500 88,000 64,800 59,200 80, 408 83,500 57,000 10,271 10,187 3,734 320,021 301,513 192,566 $530,000 $495,000 $350,000 sok At December 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 mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity nt int $131,970 $ 82,818 $ 47,586 ences 98,644 113,850 76,576 162,500 162,500 162,500 136,886 135, 832 63,338 $530,000 $495,000 $350,000 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 Total costs and expenses Net income Earnings per share Current Yr $689,000 $ 420,290 213,590 11,713 8,957 654,550 $ 34,450 1 Yr Ago $ 589,050 $382,883 149,030 13,548 8,836 554,297 $ 34,753 $ 2.12 $ 2.14 Additional information about the new fallava

Answer 1

Return on Common Stockholder;s Equity
	Choose Numerator		/	Chhose Denominator	=	Return on Common Stockholder Equity
	Net Income			Average Equity
Current Year	$34,450.00		/	$262,085.000		13.14%
				162500+(135832+63338)/2
1 Yr Ago	$34,753.00		/	$298,859.000		11.63%
				162500+(135832+136886)/2

Price Earning per share
Year	Choose Numerator		/	Chhose Denominator	=	PE Ratio
	Current Stock price			EPS
Current Year	$33.000		/	$2.120		15.57
Last year	$31.00		/	$2.14		14.49

Competitors PE ratio of 8 times is lower than Simon's PE ratio of 15.57 times . It shows that Simon has higher market expectation

Dividend Yield
Year	Choose Numerator		/	Chhose Denominator	=	Dividend Yield Ratio
	Dividend per share			Current Stock price
Current Year	$0.220		/	$33.000		0.67%
1 Yr Ago	$0.11		/	$31.00		0.35%

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