Required information Exercise 17-10 Efficiency and profitability analysis LO P3 (The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. 2017 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 31,400 $ 36,500 $ 37,200 86,600 62,500 50,500 112,000 82,400 54,500 10,400 9,200 4,900 278,000 252,500 231,000 $518,400 $443,100 $378, 100 $128,400 $ 72,250 $ 51,600 97,500 101,500 80,400 162,000 162,000 162,000 130,500 107,350 84,100 $518,400 $443,100 $378,100 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 $725,000 $435,000 210, 250 12,200 9,350 666,800 $ 58,200 $ 3.59 2016 $590,000 $371,700 135,700 12,700 8,550 528,650 $ 61,350 $ 3.79 Evaluate the company's efficiency and profitability by computing the following for 2017 and 2016. Exercise 17-10 Part 1 (1) Profit margin ratio. Profit Margin Ratio | Choose Denominator: Choose Numerator: Profit Margin Ratio Profit margin ratio 1 2017 % 2016 1 % Exercise 17-10 Part 2 (2) Total asset turnover. Total Asset Turnover Choose Numerator: 1 Choose Denominator: = Total Asset Turnover / Total asset turnover 2017 / times 2016 / times Exercise 17-10 Part 3 (3) Return on total assets. Return On Total Assets 1 Choose Denominator: Choose Numerator: = Return On Total Assets / = Return on total assets 2017 1 = % 2016 1 %