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 $ 32,200 $ 36,500 $ 37,200 86,800 63,500 50,000 111,000 82,000 52,500 10, 750 9,450 4,100 279,000 258,000 228,000 $519,750 $449,450 $371, 800 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 $128,800 $ 74,000 $ 51,600 98,000 101,250 81,600 160,000 160,000 160,000 132,950 114,200 78,600 $519,750 $449,450 $371,800 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 2017 2016 Sales $695,000 $ 590,000 Cost of goods sold $423,950 $365,800 Other operating expenses 215,450 135, 700 Interest expense 11,400 12,900 Income taxes 9,400 9,000 Total costs and expenses 660,200 523,400 Net income $ 34,800 $ 66,600 $ 2.17 Earnings per share $ 4.16 Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016. (1) Profit margin ratio. Profit Margin Ratio Choose Denominator: Choose Numerator: + Profit Margin Ratio Profit margin ratio % 1 2017 2016 (2) Total asset turnover. Total Asset Turnover 1 Choose Denominator: 1 Choose Numerator: Total Asset Turnover 11 Total asset turnover 11 2017 times 2016 times (3) Return on total assets. Return On Total Assets I Choose Denominator: Choose Numerator: Return On Total Assets Return on total assets % % = 2017 2016