13.
| 2015 | 2014 | 2013 | 2012 | 2011 |
| Sales | $ 282,880 | $ 270,800 | $ 252,600 | $ 234,560 | $ 150,000 |
| Cost of goods sold | 128,200 | 122,080 | 115,280 | 106,440 | 67,000 |
| Accounts receivable | 18,100 | 17,300 | 16,400 | 15,200 | 9,000 |
|
Compute trend percents for the above accounts, using 2011 as the base year.
|
|
|
| Trend Percent for Net Sales: | |
| Choose Numerator: | / | Choose Denominator: | | | |
| Analysis period net sales | / | Base year net sales | = | Sales |
| 2015: | $282,880 | / | $150,000 | = | 189 | % |
| 2014: | $270,800 | / | $150,000 | = | 181 | % |
| 2013: | $252,600 | / | $150,000 | = | 168 | % |
| 2012: | $234,560 | / | $150,000 | = | 156 | % |
| |
| Trend Percent for Cost of Goods Sold: | |
| Choose Numerator: | / | Choose Denominator: | | | |
| Analysis period cost of goods sold | / | Base year cost of goods sold | = | Cost of goods sold |
| 2015: | $128,200 | / | $67,000 | = | 191 | % |
| 2014: | $122,080 | / | $67,000 | = | 182 | % |
| 2013: | $115,280 | / | $67,000 | = | 172 | % |
| 2012: | $106,440 | / | $67,000 | = | 159 | % |
| |
| Trend Percent for Accounts Receivables: | |
| Choose Numerator: | / | Choose Denominator: | | | |
| Analysis period accounts receivable | / | Base year accounts receivable | = | Accounts receivable |
| 2015: | $18,100 | / | $9,000 | = | 201 | % |
| 2014: | $17,300 | / | $9,000 | = | 192 | % |
| 2013: | $16,400 | / | $9,000 | = | 182 | % |
| 2012: | $15,200 | / | $9,000 | = | 169 | % |
|
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14.
| Simon Company’s year-end balance sheets follow. More Simon(s) are waiting for you down there... |
| 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
mortgages 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 |
| | |
|
| |
|
| |
|
|
|
Express the balance sheets in common-size percents. (Do not round intermediate calculations and round your final percentage answers to 1 decimal place.)
|
|
|
| SIMON COMPANY |
| Common-Size Comparative Balance Sheets |
| December 31, 2013-2015 |
| 2015 | 2014 | 2013 |
| Cash | 6.1 | % | 8.0 | % | 10.0 | % |
| Accounts receivable, net | 17.1 | | 14.0 | | 13.3 | |
| Merchandise inventory | 21.5 | | 18.5 | | 14.3 | |
| Prepaid expenses | 2.0 | | 2.1 | | 1.3 | |
| Plant assets, net | 53.3 | | 57.3 | | 61.1 | |
| Total assets | 100.0 | % | 100.0 | % | 100.0 | % |
| |
| Accounts payable | 24.8 | % | 16.9 | % | 13.6 | % |
| Long-term notes payable secured by mortgages on plant assets | 18.8 | | 22.9 | | 22.1 | |
| Common stock, $10 par | 31.3 | | 36.7 | | 43.3 | |
| Retained earnings | 25.1 | | 23.5 | | 21.0 | |
| Total liabilities and equity | 100.0 | % | 100.0 | % | 100.0 | % |
|
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15.
| Simon Company’s year-end balance sheets follow. |
| 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
mortgages 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 |
| | |
|
| |
|
| |
|
|
|
| (1) |
Compute the current ratio for the year ended 2015, 2014, and 2013.
|
|
|
| Current Ratio |
| Choose Numerator: | / | Choose Denominator: | = | Current Ratio |
| Current assets | / | Current liabilities | = | Current ratio |
| 2015: | $244,500 | / | $129,900 | = | 1.88 | to 1 |
| 2014: | $190,000 | / | $75,250 | = | 2.52 | to 1 |
| 2013: | $147,000 | / | $51,250 | = | 2.87 | to 1 |
|
| (2) |
Compute the acid-test ratio for the year ended 2015, 2014, and 2013.
|
|
|
| Acid-Test Ratio |
| Choose Numerator: | / | Choose Denominator: | = | Acid-Test Ratio |
| Cash | + | Short-term investments | + | Current receivables | / | Current liabilities | = | Acid-test ratio |
| 2015: | $31,800 | + | 0 | + | $89,500 | / | $129,900 | = | 0.93 | to 1 |
| 2014: | $35,625 | + | 0 | + | $62,500 | / | $75,250 | = | 1.30 | to 1 |
| 2013: | $37,800 | + | 0 | + | $50,200 | / | $51,250 | = | 1.72 | to 1 |
|
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16.
| Simon Company’s year-end balance sheets follow. |
| 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
mortgages 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 |
| | |
|
| |
|
| |
|
|
|
| The company’s income statements for the years ended December 31, 2015 and 2014, follow. |
| 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 costs and expenses | | | | | 642,400 | | | | | | 502,625 |
| | | |
|
| | | | |
|
|
| Net income | | | | $ | 31,100 | | | | | $ | 29,375 |
| | | |
|
| | | | |
|
|
| Earnings per share | | | | $ | 1.90 | | | | | $ | 1.80 |
| | | |
|
| | | | |
|
|
|
| Calculate the company’s long term risk and capital structure positions at the end of 2015 and 2014 by computing the following ratios. |
| (1) | Debt and equity ratios. |
|
|
| Debt Ratio | |
| Choose Numerator: | / | Choose Denominator: | = | Debt Ratio | |
| Total liabilities | / | Total assets | = | Debt ratio |
| 2015: | $228,400 | / | $523,000 | = | 43.7 | % |
| 2014: | $176,750 | / | $445,000 | = | 39.7 | % |
| Equity Ratio | |
| Choose Numerator: | / | Choose Denominator: | = | Equity Ratio | |
| Total equity | / | Total assets | = | Equity ratio |
| 2015: | $294,600 | / | $523,000 | = | 56.3 | % |
| 2014: | $268,250 | / | $445,000 | = | 60.3 | % |
|
|
|
| Debt-To-Equity Ratio |
| Choose Numerator: | / | Choose Denominator: | = | Debt-To-Equity Ratio |
| Total liabilities | / | Total equity | = | Debt-to-equity ratio |
| 2015: | $228,400 | / | $294,600 | = | 0.78 | to 1 |
| 2014: | $176,750 | / | $268,250 | = | 0.66 | to 1 |
|
| (3) | Times interest earned. |
|
|
| Times Interest Earned |
| Choose Numerator: | / | Choose Denominator: | = | Times Interest Earned |
| Income before interest and inc tax | / | Interest expense | = | Times interest earned |
| 2015: | $52,725 | / | $12,100 | = | 4.4 | times |
| 2014: | $51,520 | / | $13,300 | = | 3.9 | times |
|
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17.
| Simon Company’s year-end balance sheets follow. |
|
| 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
mortgages 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 |
| | |
|
| |
|
| |
|
|
|
| The company’s income statements for the years ended December 31, 2015 and 2014, follow. |
|
| 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 costs and expenses | | | | | 642,400 | | | | | | 502,625 |
| | | |
|
| | | | |
|
|
| Net Income | | | | $ | 31,100 | | | | | $ | 29,375 |
| | | |
|
| | | | |
|
|
| Earnings per share | | | | $ | 1.90 | | | | | $ | 1.80 |
| | | |
|
| | | | |
|
|
|
| Evaluate the company's efficiency and profitability by computing the following for 2015 and 2014. |
|
|
| Profit Margin Ratio |
| Choose Numerator: | / | Choose Denominator: | = | Profit Margin Ratio | |
| Net income | / | Net sales | = | Profit margin ratio |
| 2015 | $31,100 | / | $673,500 | = | 4.6 | % |
| 2014 | $29,375 | / | $532,000 | = | 5.5 | % |
|
|
|
| Total Asset Turnover |
| Choose Numerator: | / | Choose Denominator: | = | Total Asset Turnover |
| Net sales | / | Average total assets | = | Total asset turnover |
| 2015 | $673,500 | / | $484,000 | = | 1.4 | times |
| 2014 | $532,000 | / | $411,250 | = | 1.3 | times |
|
| (3) | Return on total assets. |
|
|
| Return On Total Assets |
| Choose Numerator: | / | Choose Denominator: | = | Return On Total Assets | |
| Net income | / | Average total assets | = | Return on total assets |
| 2015 | $31,100 | / | $484,000 | = | 6.4 | % |
| 2014 | $29,375 | / | $411,250 | = | 7.1 | % |
|
-----------------------------------------------------------------------------------------------------------------------------------
18.
| Simon Company’s year-end balance sheets follow. |
| 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
mortgages 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 |
| | |
|
| |
|
| |
|
|
|
| The company’s income statements for the years ended December 31, 2015 and 2014, follow. |
| 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 costs and expenses | | | | | 642,400 | | | | | | 502,625 |
| | | |
|
| | | | |
|
|
| Net Income | | | | $ | 31,100 | | | | | $ | 29,375 |
| | | |
|
| | | | |
|
|
| Earnings per share | | | | $ | 1.90 | | | | | $ | 1.80 |
| | | |
|
| | | | |
|
|
|
| Additional information about the company follows. |
|
| |
| Common stock market price, December 31, 2015 | $30.00 |
| Common stock market price, December 31, 2014 | 28.00 |
| Annual cash dividends per share in 2015 | 0.29 |
| Annual cash dividends per share in 2014 | 0.24 |
|
| To help evaluate the company's profitability, compute the following ratios for 2015 and 2014: |
| (1) | Return on common stockholders' equity. |
|
|
| Return On Common Stockholders’ Equity | |
| Choose Numerator: | / | Choose Denominator: | = | Return On Common Stockholders’ Equity | |
| Net income | – | Preferred dividends | / | Average common stockholders’ equity | = | Return on common stockholders’ equity |
| 2015 | $31,100 | – | | / | $281,425 | = | 11.1 | % |
| 2014 | $29,375 | – | | / | $255,500 | = | 11.5 | % |
|
| (2) | Price-earnings ratio on December 31. (Round your answers to 2 decimal places.) |
|
|
| Price-Earnings Ratio |
| Choose Numerator: | / | Choose Denominator: | = | Price-Earnings Ratio |
| Market price per common share | / | Earnings per share | = | Price-earnings ratio |
| 2015 | $30.00 | / | $1.90 | = | 15.8 |
| 2014 | $28.00 | / | $1.80 | = | 15.6 |
|
| (3) | Dividend yield. (Round your answers to 2 decimal places.) |
|
|
| Dividend Yield | |
| Choose Numerator: | / | Choose Denominator: | = | Dividend Yield | |
| Annual cash dividends per share | / | Market price per share | = | Dividend yield | |
| 2015 | $0.29 | / | $30.00 | = | 1.0 | % |
| 2014 | $0.24 | / | $28.00 | = | 0.9 | % |
|
