Chapter 17-Home C newconnect.mheducation.com/flow/connect.html Chapter 17- Homew

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Chapter 17-Home C newconnect.mheducation.com/flow/connect.html Chapter 17- Homework 6 8 Simon Company's year-end balance sheets follow Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets 31,800 34,400 s 36,300 89,880 62,780 50,78e 43,787 82,80 55,800 4,222 359, 346 279,934 233,778 $535,800 $478,000 38e,0 9 points 18,267 18,166 Liabilities and Equity Accounts payable Long-term notes payable secured by $129,219 s 79,430 s 51,163 mortgages on plant assets Common stock, $1e par value Retained earnings 98,568 109,181 86,499 162,580 162,500 162, 5ee 144 713118,889 79,838 $535,000 $470 , ??? $388 , 0ee Hirt Total liabilities and equity Print The company's income statements for the years ended December 31, 2017 and 2016, follow. 2016 $ 695, see s 559, 3ee Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income $424,255 215, 6e5 11,824 9,842 s 363, 545 141,583 12,864 8.399 668.726 668.726 s 34,774 $ 2.14 526-382 5 32,998 Earnings per share s 2.8a3 Additional information about the company follows. s 28.8e 26.0a Common szock market price, December 31, ze7 Common stock rarket price, December 31, 2816 Annual cash dividends per share in 2817 Annual cash dividends per share in 2916 8.15 To heip evaluere the company's profitaplity, compute the following ratios for 2017 and 2016

Explanation / Answer

Ratio Formula 2017 2016 Return on Common Stockholder's Equity =Net Income/(Common Stock + Retained Earnings) =34774/(162500+144713) =32998/(162500+118889) Price Earning Ratio = Price per share / Earning per share =28/2.14 =26/2.03 Dividend Yield =Dividend per share / Price per share =0.3/28 =0.15/26 Ratio Formula 2017 2016 Return on Common Stockholder's Equity =Net Income/(Common Stock + Retained Earnings) 11.3% 11.7% Price Earning Ratio = Price per share / Earning per share 13.08411 12.80788 Dividend Yield =Dividend per share / Price per share 1.1% 0.6%

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