80.2K

Verified Solution

Link Copied!

Simon Companys year-end balance sheets follow.

	At December 31			2014			2013			2012
	Assets
	Cash		$	31,600		$	35,000		$	37,200
	Accounts receivable, net			86,700			63,000			49,500
	Merchandise inventory			112,000			83,200			53,000
	Prepaid expenses			10,250			9,275			4,800
	Plant assets, net			278,000			252,000			233,000
	Total assets		$	518,550		$	442,475		$	377,500
	Liabilities and Equity
	Accounts payable		$	128,800		$	75,250		$	50,200
	Long-term notes payable secured by mortgages on plant assets			96,000			101,250			82,200
	Common stock, $10 par value			163,000			163,000			163,000
	Retained earnings			130,750			102,975			82,100
	Total liabilities and equity		$	518,550		$	442,475		$	377,500

The companys income statements for the years ended December 31, 2014 and 2013, follow.

For Year Ended December 31	2014						2013
Sales				$	715,000					$	560,000
Cost of goods sold	$	450,450					$	352,800
Other operating expenses		214,500						128,800
Interest expense		12,200						12,500
Income taxes		9,550						8,625
Total costs and expenses					686,700						502,725
Net income				$	28,300					$	57,275
Earnings per share				$	1.74					$	3.51

Evaluate the company's efficiency and profitability by computing the following for 2014 and 2013. (1) Profit margin ratio. (3) Return on total assets

Answer & Explanation Solved by verified expert

See Answer