Required information

Exercise 13-10 Efficiency and profitability analysis LO P3

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

At December 31	2017			2016			2015
Assets
Cash	$	30,000		$	35,250		$	37,200
Accounts receivable, net		87,200			63,000			49,500
Merchandise inventory		110,000			81,600			53,000
Prepaid expenses		10,900			9,450			5,400
Plant assets, net		281,000			255,500			231,000
Total assets	$	519,100		$	444,800		$	376,100
Liabilities and Equity
Accounts payable	$	129,200		$	72,500		$	50,800
Long-term notes payable secured by mortgages on plant assets		96,000			100,250			81,400
Common stock, $10 par value		162,000			162,000			162,000
Retained earnings		131,900			110,050			81,900
Total liabilities and equity	$	519,100		$	444,800		$	376,100

The companys income statements for the years ended December 31, 2017 and 2016, follow.

For Year Ended December 31	2017						2016
Sales				$	715,000					$	550,000
Cost of goods sold	$	443,300					$	346,500
Other operating expenses		207,350						132,000
Interest expense		11,400						13,400
Income taxes		9,550						8,750
Total costs and expenses					671,600						500,650
Net income				$	43,400					$	49,350
Earnings per share				$	2.68					$	3.05

Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016.

Exercise 13-10 Part 1

(1) Profit margin ratio.

Exercise 13-10 Part 2

(2) Total asset turnover

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Exercise 13-10 Part 3

(3) Return on total assets.

Times Interest Earned 1 Choose Denominator: Choose Numerator: = Times Interest Earned Times interest earned times 2017: 2016: times Total Asset Turnover 1 Choose Denominator: Choose Numerator: = = Total Asset Turnover Total asset turnover times 2016 times Total Asset Turnover 1 Choose Denominator: Choose Numerator: = = Total Asset Turnover Total asset turnover times 2016 times