ACC 305 Lecture Notes - Lecture 35: Comprehensive Income, Financial Statement
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(Profitability analysis)
Refer to Simon Comanys financial information below. Additionalinformation about the company follows. To help evaluate thecompany's profitability, compute and interpret the following ratiosfor 2015 and 2014: (1) return on common stockholders equity -percent rounded to one decimal, (2) price-earnings ratio onDecember 31 - rounded to one decimal and (3) dividend yield -percent rounded to one decimal.
Common stock market price, December 31,2015.............$30.00 |
Common stock market price, December 31,2014.............$28.00 |
Annual cash dividends per share in2015........................... 0.29 |
Annual cash dividends per share in 2014........... |
Simmon Company information: For Year ended December 31 | 2015 | 2014 | ||
sales | $673,500 | $532,000 | ||
Cost of goods sold | $411,225 | $345,500 | ||
Other operating expenses | 209,550 | 134,980 | ||
Interest expense | 12,100 | 13,300 | ||
Income taxes | 9,525 | 8,845 | ||
Total cost and expenses | 642,400 | 502,625 | ||
Net income | 31,100 | 29,375 | ||
Earnings per share | 1.90 | 1.80 | ||
Simon Companys information: At December 31 | 2015 | 2014 | 2013 |
Assets | |||
Cash | $31,800 | $35,625 | $37,800 |
Accounts receivable,net | 89,500 | 62,500 | 50,200 |
Merchandise inventory | 112,500 | 82,500 | 54,000 |
Prepaid expenses | 10,700 | 9,375 | 5,000 |
Plant assets,net | 278,500 | 255,000 | 230,500 |
Total assets | $523,000 | $445,000 | $377,500 |
Liabilities and Equity | |||
Accounts payable | $129,900 | $75,250 | $51,250 |
Long-term notes payable secured by mortgage on plant assets | 98,500 | 101,500 | 83,500 |
Common Stock, $10 par value | 163,500 | 163,500 | 163,500 |
Retained earnings | 131,100 | 104,750 | 79,250 |
Total Liabilities and equity | $523,000 | $445,000 | $377,500 |