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 $ 27,800 79,766 103,330 9,042 251,242 $ 471,180 $ 33,145 $ 33, 853 56,867 45,137 76,648 48,066 8,359 3, 761 231,171 214,583 $ 406,190 $ 345, 400 $116,151 $ 70,019 $ 45,137 89,468 162,500 103,061 $ 471,180 94,358 76,333 162,500 162,500 79,313 61,430 $ 406,190 $ 345,400 The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Sales COSE of goods sold other operating expenses Interest expense Income tax expense Total costs and expenses Net income Earnings per share Current Yr $ 612,534 $373,646 189,886 10,413 7,963 581,908 $ 30,626 S 1.88 1 Yr Ago $ 483,366 $ 314,188 122,292 11, 117 7,250 454,847 $ 28,519 $ 1.76 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: Choose Denominator: Debt Ratio Debt ratio 1 Current Year: % % 1 Year Ago: Equity Ratio Choose Numerator: Choose Denominator: Equity Ratio Equity ratio = = Current Year: % 1 Year Ago: For both the Current Year and 1 Year Ago, compute the following ratios: Exercise 13-9 Part 2 (2) Debt-to-equity ratio. Debt-To-Equity Ratio Choose Numerator: Choose Denominator: 11 Debt-To-Equity Ratio Debt-to-equity ratio to 1 11 Current Year: 11 1 Year Ago: to 1 Exercise 13-9 Part 3 (3-a) Times interest eamed. (3-6) 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 3B Times Interest earned. Times Interest Earned Choose Numerator: Choose Denominator: Times Interest Earned Times interest earned times Current Year: TYear Ago: Required 38 > Exercise 13-9 Part 3 (3-a) Times interest eamed. (3-6) 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 3B Based on times interest earned, is the company more or less risky for creditors in the Current Year versus 1 Year Ago? Times Interesteamed