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 $ 26,147 77,329 97,227 8, 420 243,096 $452,219 $ 31,499 $ 32,819 52,941 44,633 73,564 47,544 7,941 P. 719 223,899 202, 785 $ 389,844 $ 331,500 $112,603 $ 66,542 $ 42, 445 85,867 162,500 91,249 $452,219 90,561 72,529 162,500 162,500 70,241 54,026 $ 389,844 $ 331,500 The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Current X 1 Yr Ago Sale $587,885 $ 463,914 Cost of goods sold $358,610 $301,544 Other operating expenses 182,244 117,370 Interest expense 9,994 10,670 Income tax expense 7.643 6,959 Total costs and expenses 558,491 436,543 Net income $ 29,394 $ 27,371 Earnings per share $ 1.81 $ 1.68 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: Total liabilities Debt Ratio Choose Denominator: Total assets Debt ratio Current Year: 1 % 1 Year Ago: 11 % Equity Ratio Choose Numerator: 1 Choose Denominator: Total equity 1 Total assets / + Equity Ratio Equity ratio Current Year: 1 Year Ago: = = / 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 0 to 1 Current Year: 1 1 Year Ago: 10 0 to 1