Exercise 13-9 Analyzing risk and capital structure LO P3 (The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs Ago At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 35,255 101,177 127,211 10,908 311,271 $585,822 $ 40,806 $ 42,085 72,824 57,235 92,494 60,364 10,605 4,770 288,290 260,646 $ 505,019 $ 425,100 $145,870 $ 85,348 $ 54,430 109,033 162,500 168,419 $585,822 113,831 93,947 162,500 162,500 143,340 114,223 $ 505,019 $ 425,100 The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income Current Yr $761,569 $464,557 236,086 12,947 9,900 723,490 $ 38,079 $ 2.34 1 Yr Ago $ 600,973 $390,632 152,046 13,822 9,015 565,515 $ 35,458 $ 2.18 Earnings per share For both the Current Year and 1 Year Ago, compute the following ratios: Exercise 13-9 Part 1 (1) Debt and equity ratios. Debt Ratio Choose Numerator: 1 Choose Denominator: Debt Ratio Total assets 1 Current liabilities Debt ratio 1 = 0 % Current Year: 1 Year Ago: = 0 % Equity Ratio Choose Numerator: / Choose Denominator: = Equity Ratio Equity ratio 11 Current Year: 0 % 1 Year Ago: = 0 % Exercise 13-9 Part 2 (2) Debt-to-equity ratio. Debt-To-Equity Ratio Choose Numerator: Choose Denominator: 1 = Debt-To-Equity Ratio Debt-to-equity ratio Oto 1 Current Year: II 1 Year Ago: 11 0 to 1