Exercise 13-9 Risk and capital structure analysis LO P3 The following information applies to the questions displayed below. Simon Company's year-end balance sheets follow At December 31 Assets Cash Accounts receivable, net Merchandise inventorv Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured 2017 2016 $ 31, 800 35, 625 37,800 89,500 62,500 50,200 112, 500 82,500 54, 000 5, 000 278, 500 255,000 230,500 $523, 000 445,000 $377,500 10,700 9,375 $129, 900 75,250 51,250 by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 98,500 101,500 83, 500 163,500 163,500 163, 500 131,100 104,750 79,250 523, 000 $445,000 $377,500 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expen3es Interest expense Income taxes Total costs and expen3es Net income 2017 2016 $673,500 $532,000 $411,225 209,550 12,100 9,525 $345,500 134,980 13,300 B,845 642,400 31,100 $ 1.90 502, 625 $ 29,375 $ 1.80 Earnings per share Calculate the company's long-term risk and capital structure positions at the end of 2017 and 2016 by computing the following ratios. Exercise 13-9 Part 2 (2) Debt-to-equity ratio. Choose Numerator Choose Denominator - Debt-To-Equity Ratio -Debt-to-equity ratio 2017 to 1 2016 to 1