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I need help understanding this 3 part question.

Required information Exercise 13-10 Efficiency and profitability analysis LO P3 [The following information applies to the questions displayed below. ] Simon Company's year-end balance sheets follow. At December 31 2017 2016 2015 Assets Cash 5 32,200 $ 35,750 5 38,200 Accounts receivable, net 88,700 61,000 50,000 Merchandise inventory 111,500 83,800 54,500 Prepaid expenses 10,450 9,250 4,800 Plant assets, net 278,000 248,000 227,000 Total assets $520,850 $437,800 $374,500 Liabilities and Equity Accounts payable $129,200 $ 75,000 $ 51,400 Long-term notes payable secured by mortgages on plant assets 97,500 100,500 82,400 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 130,650 98,800 77,200 Total liabilities and equity $520,850 $437,800 $374,500 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 2017 2016 sales $755,000 $ 600,000 Cost of goods sold $468,100 $378,000 other operating expenses 211,400 138,000 Interest expense 11,500 13,300 Income taxes 9,400 8,600 Total costs and expenses 700,400 537,900 Net income $ 54,600 $ 62,100 Total costs and expenses 100 , 400 537 ,900 Net income $ 54 , 600 $ 62, 100 Earnings per share $ 3. 34 $ 3 . 80 Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016. Exercise 13-10 Part 1 (1) Profit margin ratio. Profit Margin Ratio Choose Numerator: / Choose Denominator: = Profit Margin Ratio = Profit margin ratio 2017 S % 2016 %