Exercise 13 11 Analyzing efficiency and profitability LO P3 Skip to question The following information applies to the questions displayed below Simon Companys year end balance sheets follow At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 31,800 $ 35,625 $ 37,800 Accounts receivable, net 89,500 62,500 50,200 Merchandise inventory 112,500 82,500 54,000 Prepaid expenses 10,700 9,375 5,000 Plant assets, net 278,500 255,000 230,500 Total assets $ 523,000 $ 445,000 $ 377,500 Liabilities and Equity Accounts payable $ 129,900 $ 75,250 $ 51,250 Long term notes payable 98,500 101,500 83,500 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 131,100 104,750 79,250 Total liabilities and equity $ 523,000 $ 445,000 $ 377,500 The companys income statements for the current year and 1 year ago, follow For Year Ended December 31 Current Yr 1 Yr Ago Sales $ 673,500 $ 532,000 Cost of goods sold $ 411,225 $ 345,500 Other operating expenses 209,550 134,980 Interest expense 12,100 13,300 Income tax expense 9,525 8,845 Total costs and expenses 642,400 502,625 Net income $ 31,100 $ 29,375 Earnings per share $ 1 90 $ 1 80 For both the Current Year and 1 Year Ago, compute the following ratios Exercise 13 11 (Static) Part 1 (1 a) Profit margin ratio Profit Margin Ratio Choose Numerator Choose Denominator Profit Margin Ratio Profit margin ratio Current Year 1 Year Ago (1 b) Did profit margin improve or worsen in the Current Year versus 1 Year Ago Profit margin Worsened (2) Total asset turnover Total Asset Turnover Choose Numerator Choose Denominator Total Asset Turnover Total Asset Turnover Current Year times 1 Year Ago times (3 a) 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 (3 b) Based on return on total assets, did Simon's operating efficiency improve or worsen in the Current Year versus 1 Year Ago Return on total assets Worsened

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Question: Exercise 13-11 Analyzing efficiency and profitability LO P3 Skip to question [The following information applies to the questions displayed below.] Simon Companys year-end balance sheets

Exercise 13-11 Analyzing efficiency and profitability LO P3

Skip to question

[The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow.

At December 31	Current Yr		1 Yr Ago		2 Yrs Ago
Assets
Cash	$	31,800	$	35,625	$	37,800
Accounts receivable, net		89,500		62,500		50,200
Merchandise inventory		112,500		82,500		54,000
Prepaid expenses		10,700		9,375		5,000
Plant assets, net		278,500		255,000		230,500
Total assets	$	523,000	$	445,000	$	377,500
Liabilities and Equity
Accounts payable	$	129,900	$	75,250	$	51,250
Long-term notes payable		98,500		101,500		83,500
Common stock, $10 par value		163,500		163,500		163,500
Retained earnings		131,100		104,750		79,250
Total liabilities and equity	$	523,000	$	445,000	$	377,500

The companys income statements for the current year and 1 year ago, follow.

For both the Current Year and 1 Year Ago, compute the following ratios:

Exercise 13-11 (Static) Part 1

(1-a) Profit margin ratio.

(1-b) Did profit margin improve or worsen in the Current Year versus 1 Year Ago?

Profit margin

Worsened

(2) Total asset turnover.

(3-a) Return on total assets.

(3-b) Based on return on total assets, did Simon's operating efficiency improve or worsen in the Current Year versus 1 Year Ago?


Return on total assets	Worsened

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