Hi could you please complete all parts? Required intormation 1 The following inf

Question

Hi could you please complete all parts?

Required intormation 1 The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets 2016 2015 $. 31,200 36,250 37,000 51,000 52,000 4,400 000 233,000 $522,050 $445,050 377,400 89,600 63,00e 110,500 83,400 9,400 10,750 280,000 253, Liabilities and Equity Accounts payable Long-term notes payable secured by $129,600 75,500 50,800 mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 98,000 100,000 82,600 163,500 163,500 163,508 80,500 $522,050 $445,050 377,400 130,950 106,050 The company's income statements for the years ended December 31, 2017 and 2016, follow For Year Ended December 31 2017 2016 $695,000 $ 570,000 ales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income $430,900 194,600 11,200 9,350 $359,106e 131,100 12,800 8525 646,050 $ 48,950 $ 2.99 511,525 $ 58,475 $ 3.58 Earnings per share Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016

Explanation / Answer

Required ratios are as computed below:

(1) profit Margin ratio

Profit Margin ratio is the net income which is generated by each dollar of sales.

(2) Total assets turnover

Asset Turnover ratio is the ability of a company to use its assets to generate more sales.

This ratio is computed by dividing the Net sales by average of total assets.

Year 2016

Net sales for year 2016 is $570,000

Total assets for year 2015 is $377,400 and total assets for year 2016 is $445,050.

So average of total assets is $411,225

Year 2017

Net sales for year 2017 is $695.000

Total assets for year 2016 is $445,050 and total assets for year 2017 is $522,050.

So average of total assets is $483,550

3. Return on total assets

Return on assets is the net income divided by the average of total assets

Profit Margin ratio Choose Numerator Divided by Choose Denominator Profit Margin ratio 2017 48,950 695,000 7.04% 2016 58,475 570,000 10.26%

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