Required information Exercise 17-10 Efficiency and profitability analysis LO P3 [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. 2017 2016 2015 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 $ 30,800 $ 36,250 $ 37,200 89,300 61,000 50,000 112,000 81,200 54,000 10,250 9,350 4,200 281,000 259,000 232,000 $523,350 $446,800 $377,400 $129,200 $ 73,000 $ 50,800 97,500 98,000 81,400 162,000 162,000 162,000 134,650 113,800 83,200 $523,350 $446,800 $377,400 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 2017 $755,000 $ 453,000 234,050 12,100 9,500 708,650 $ 46,350 2016 $ 630,000 $403, 200 157,500 13,100 8,925 582,725 $ 47,275 Net income Earnings per share $ 2.86 $ 2.92 Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016. Exercise 17-10 Part 1 (1) Profit margin ratio. Profit Margin Ratio | Choose Denominator: Choose Numerator: II = = Profit Margin Ratio Profit margin ratio / = 2017 / = = % 2016 / = II % Exercise 17-10 Part 2 (2) Total asset turnover. Total Asset Turnover Choose Numerator: 1 Choose Denominator: = Total Asset Turnover 1 - Total asset turnover 2017 1 = times 2016 1 = times Exercise 17-10 Part 3 (3) Return on total assets. Return On Total Assets Choose Numerator: 1 Choose Denominator: = Return On Total Assets 1 Return on total assets 2017 / % = = 2016 / 11 % %