12

Simon Companys year-end balance sheets follow.

At December 31	Current Year	1 Year Ago	2 Years Ago
Assets
Cash	$ 31,034	$ 35,565	$ 37,036
Accounts receivable, net	88,182	63,483	49,381
Merchandise inventory	113,090	83,065	52,606
Prepaid expenses	9,896	9,429	4,035
Plant assets, net	273,484	253,015	220,142
Total assets	$ 515,686	$ 444,557	$ 363,200
Liabilities and Equity
Accounts payable	$ 125,838	$ 75,130	$ 47,463
Long-term notes payable	97,918	103,271	81,873
Common stock, $10 par value	162,500	162,500	162,500
Retained earnings	129,430	103,656	71,364
Total liabilities and equity	$ 515,686	$ 444,557	$ 363,200

The companys income statements for the current year and one year ago, follow.

For Year Ended December 31	Current Year		1 Year Ago
Sales		$ 670,392		$ 529,023
Cost of goods sold	$ 408,939		$ 343,865
Other operating expenses	207,822		133,843
Interest expense	11,397		12,168
Income tax expense	8,715		7,935
Total costs and expenses		636,873		497,811
Net income		$ 33,519		$ 31,212
Earnings per share		$ 2.06		$ 1.92

rev: 09_07_2021_QC_CDR-376

(3-a) Compute times interest earned for the current year and one year ago. (3-b) Based on times interest earned, is the company more or less risky for creditors in the Current Year versus 1 Year Ago?