Question

Required Informetlon The following information applies to the questions displayed below. 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 Liabilities and Equity Accounts payable Long-term notes payable secured by 2817 2816 2815 38,288 35,750 $38,28e 51,eee 89,380 113,eee 18,580 62,see 81,800 9,480 52,58 4,888 278,80 254,58 232,8ee 5521,808 $443,158 378,58e $13e,8ee 73,8 51,886e mortgages on plant assets Common stock, $18 par value Retained earnings Total liabilities and equity 8e,686 161,508 161,580 161,58e 85,48e $521, 80 $443,15 378, 58e 132,588 188,15e The company's Income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income 2817 2816 $785,80e 588,8ee $423,880 211,580 11,980 9, 38e $365,48e 133,480 13,480 8,658 528,850 $ 59,15 $ 3.66 49,30e Earnings per share $3.85 Evaluate the company's efficiency and profitablity by computing the following for 2017 and 2016. (1) Profit margin ratio Profit Margin Ratio Choose Numerator: l Choose Denominator Profit Margin Ratio Profit margin ratio 2017 2016 (2) Total asset turnover. Total Asset Turnover - Total Asset Turnover I Choose Denominator: Choose Numerator Total asset turnover times 2017 times 2016 (3) Return on total assets. Return On Total Assets Choose Numerator I Choose Denominator: Return On Total Assets Return on total assets 2017 2016 96

Answer 1

Profit Margin Ratio(%) 1) Profit margin ratio Choose Numerator Net income Profit Margin Ratio Choose Denominator | Net sales / 7.00% 10.1 49,300 705,000 580,000 59,150 2)Total asset turnover Total asset turnover Choose Denominator: Average total assets 2Total asset turnover Choose Numerator Net saless 705,000 580,000 482,075 410,825 1.46 1.4.11 3)Return on total assets Return on total assets Choose Numerator Choose Denominator: Return on total assets(%) Net income Aerage total assets 49,300 59,150 482,075 410,825 10.22 14.3

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