(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
(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 |
Related questions
(Liquidity analysis and interpretation)
Refere to Simon Company information below. The companys incomestatements for the year ended December 31, 2015 and 2014, follow.Assume that all sales are on credit and the compte: (1) day's salesuncollected, (2) accounts receivable turnover, (3) inventoryturnover, and (4) days's sales in inventory. Comment on the changesin the ratios from 2014 a to 2015. (round amounts to onedecimal)
2. (Risk and capital structure analysis) Compare the company'slong-term risk and capital structure positions at the end of 2015and 2014 by computing ratios: (1) debt and equity ratios-percentrounded to one decimal, (2) debt-to equity ratio - rounded to twodecimals and (3) times interest earned-rounded to one decimal.Comment on these ratio results.
| 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 |
