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Use the following information for the Exercises below. (Algo)

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

At December 31	Current Year	1 Year Ago	2 Years Ago
Assets
Cash	$ 26,864	$ 31,402	$ 32,383
Accounts receivable, net	77,860	55,502	44,473
Merchandise inventory	98,873	71,164	45,519
Prepaid expenses	8,738	7,996	3,562
Plant assets, net	242,988	226,456	201,163
Total assets	$ 455,323	$ 392,520	$ 327,100
Liabilities and Equity
Accounts payable	$ 109,974	$ 65,009	$ 43,177
Long-term notes payable	83,889	90,280	73,735
Common stock, $10 par value	162,500	162,500	162,500
Retained earnings	98,960	74,731	47,688
Total liabilities and equity	$ 455,323	$ 392,520	$ 327,100

For both the current year and one year ago, compute the following ratios:

Exercise 13-11 (Algo) Analyzing profitability LO P3

The companys income statements for the Current Year and 1 Year Ago, follow.

For Year Ended December 31	Current Year		1 Year Ago
Sales		$ 591,920		$ 467,099
Cost of goods sold	$ 361,071		$ 303,614
Other operating expenses	183,495		118,176
Interest expense	10,063		10,743
Income tax expense	7,695		7,006
Total costs and expenses		562,324		439,539
Net income		$ 29,596		$ 27,560
Earnings per share		$ 1.82		$ 1.70

Additional information about the company follows.

Common stock market price, December 31, Current Year	$ 29.00
Common stock market price, December 31, 1 Year Ago	27.00
Annual cash dividends per share in Current Year	0.32
Annual cash dividends per share 1 Year Ago	0.16

For both the current year and one year ago, compute the following ratios: 1. Return on equity. 2. Dividend yield. 3a. Price-earnings ratio on December 31. 3b. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growth?