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 $ 25,928 75,906 95,438 8,265 238, 360 $443,897 $ 31,532 $ 32,537 54,645 42,953 69,378 46,207 8,036 3,472 219,079 200,231 $ 382,670 $ 325,400 $112,741 $ 62,731 $ 43,382 81,784 162,500 86,872 $443,897 86,254 69,756 162,500 162,500 71, 185 49,762 $ 382,670 $ 325,400 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 $577,066 $352,010 178,890 9,810 7,502 548,212 $ 28,854 $ 1.78 1 Yr Ago $ 455, 377 $295,995 115,210 10,474 6,831 428,510 $ 26,867 $ 1.65 Earnings per share For both the Current Year and 1 Year Ago, compute the following ratios: 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: = / = = Debt-To-Equity Ratio Debt-to-equity ratio oto 1 Current Year: / 1 Year Ago: / = 0 to 1 Exercise 13-9 Part 3 (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 3B Times interest earned. Times Interest Earned Choose Numerator: 1 Choose Denominator: = Times Interest Earned 1 II Times interest earned times Current Year: 1 II 1 Year Ago: / = times Required 3A Required 3B > 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 interest earned Required 3A Required 3B