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Simon Company$$s year$-$end balance sheets follow.

At December $31$ Current Year $1$ Year Ago $2$ Years Ago

Assets

Cash $ $31,800$ $ $35,625$ $ $37,800$

Accounts receivable, net $89,50062,50050,200$

Merchandise inventory $112,50082,50054,000$

Prepaid expenses $10,7009,3755,000$

Plant assets, net $278,500255,000230,500$

Total assets $ $523,000$ $ $445,000$ $ $377,500$

Liabilities and Equity

Accounts payable $ $129,900$ $ $75,250$ $ $51,250$

Long$-$term notes payable $98,500101,50083,500$

Common stock, $$10$ par value $163,500163,500163,500$

Retained earnings $131,100104,75079,250$

Total liabilities and equity $ $523,000$ $ $445,000$ $ $377,500$

For both the current year and one year ago, compute the following ratios:

The company$$s income statements for the current year and one year ago, follow.

For Year Ended December $31$ Current Year $1$ Year Ago

Sales $ $673,500$ $ $532,000$

Cost of goods sold $ $411,225$ $ $345,500$

Other operating expenses $209,550134,980$

Interest expense $12,10013,300$

Income tax expense $9,5258,845$

Total costs and expenses $642,400502,625$

Net income $ $31,100$ $ $29,375$

Earnings per share $ $1\mathrm{.}90$ $ $1\mathrm{.}80$

$(1)$ Debt and equity ratios.

$(2-$a$)$ Compute debt$-$to$-$equity ratio for the current year and one year ago.

$(2-$b$)$ Based on debt$-$to$-$equity ratio, does the company have more or less debt in the current year versus one year ago?

$(3-$a$)$ Times interest earned.

$(3-$b$)$ Based on times interest earned, is the company more or less risky for creditors in the Current Year versus $1$ Year Ago?

Complete this question by entering your answers in the tabs below.

Required $1$Required $2$ARequired $2$BRequired $3$ARequired $3$B

Compute debt and equity ratio for the current year and one year ago.

Debt Ratio

Numerator: $/$ Denominator: $=$ Debt Ratio

Total liabilities $/=$ Debt ratio

Current Year: $$228,400/=0\%$

$1$ Year Ago: $$176,750/=0\%$

Equity Ratio

Numerator: $/$ Denominator: $=$ Equity Ratio

$/=$ Equity ratio

Current Year: $/=0\%$

$1$ Year Ago: $/=0\%$

Required $1$

Complete this question by entering your answers in the tabs below.

Required $1$Required $2$ARequired $2$BRequired $3$ARequired $3$B

Compute debt$-$to$-$equity ratio for the current year and one year ago.

Debt$-$To$-$Equity Ratio

Numerator: $/$ Denominator: $=$ Debt$-$To$-$Equity Ratio

$/=$ Debt$-$to$-$equity ratio

Current Year: $/=0$ to $1$

$1$ Year Ago: $/=0$ to $1$

Required $2$BRequired $3$ARequired $3$B

Based on debt$-$to$-$equity ratio, does the company have more or less debt in the current year versus one year ago?

Based on debt$-$to$-$equity ratio, the company has more debt in the current year versus one year ago.

Compute times interest earned for the current year and one year ago.

Times Interest Earned

Numerator: $/$ Denominator: $=$ Times Interest Earned

$/=$ Times interest earned

Current Year: $/=0$ times

$1$ Year Ago: $/=0$ times

Required $2$B

Based on times interest earned, is the company more or less risky for creditors in the Current Year versus $1$ Year Ago?

Based on times interest earned, the company is less risky for creditors in the current year versus one year ago.

Required $3$A