Exercise 13-10 (Algo) Analyzing risk and capital structure LO P3 (The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. At December 31 Current Y 1 Yr Ago 2 Yrs Ago Assets Cash $ 26,834 $ 31,677 $ 32, 353 Accounts receivable, net 76,233 53,261 42,702 Merchandise inventory 96,817 72,535 47,343 Prepaid expenses 8,727 8,315 3,704 Plant assets, net 241,699 222,410 203,998 Total assets $450,310 $ 388,198 $ 330,100 Liabilities and Equity Accounts payable $113,248 $ 66,262 $ 42,702 Long-term notes payable 83,812 89,286 73,682 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 90,750 70,150 51,216 Total liabilities and equity $450,310 $ 388,198 $ 330,100 The company's income statements for the current year and one year ago, follow. For Year Ended December 31 Current Yr 1 Yr Ago Sales $585,403 $ 461,956 Cost of goods sold $357,096 $300,271 Other operating expenses 181,475 116,875 Interest expense 9,952 10,625 Income tax expense 7,610 Total costs and expenses 556,133 434,700 Net income $ 29,270 $ 27,256 Earnings per share $ 1.80 $ 1.68 6,929 For both the current year and one year ago, compute the following ratios: (1) Debt and equity ratios. Debt Ratio Choose Numerator: Choose Denominator: = Debt Ratio Debt ratio 11 Current Year: 1 Year Ago: Equity Ratio Choose Numerator: Choose Denominator: = Equity Ratio Equity ratio 1 1 = Current Year: 1 Year Ago: (2) Debt-to-equity ratio. 1 = % Debt-To-Equity Ratio Choose Numerator: 1 Choose Denominator: 1 = Debt-To-Equity Ratio Debt-to-equity ratio Current Year: 1 = to 1 1 Year Ago: 1 to 1 (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 3A Required 38 Times interest earned Times Interest Earned Choose Numerator: 1 Choose Denominator: Times Interest Earned Times interest earned Current Year: times 1 Year Ago: times (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 3A Required 38 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 for creditors in the current year versus one year ago