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. 2017 2016 2015 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 $ 28,868 $ 34,413 $ 33,103 83,669 59,053 44,588 105,198 78,807 48,450 9,205 8,683 3,678 257,510 236,673 211,381 $484,450 $417,629 $341,200 $118,215 $ 69,168 $ 45,489 91,077 95,094 73,897 162,500 162,500 162,500 112,658 90,867 59,314 $484,450 $417,629 $341,200 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 expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 629.785 $384,169 195, 233 10,706 8,187 598, 295 $ 31,490 2016 $ 496,979 $323,036 125,736 11,431 7,455 467,658 $ 29, 321 $ 1.94 $ 1.80 (1) Debt and equity ratios. Debt Ratio Choose Denominator: Choose Numerator: = Debt Ratio Debt ratio 2017: 2016: Equity Ratio 1 Choose Denominator: Choose Numerator: = Equity Ratio Equity ratio 11 2017: 2016: (2) Debt-to-equity ratio. Debt-To-Equity Ratio 1 Choose Denominator: Choose Numerator: Debt-To-Equity Ratio Debt-to-equity ratio 0 to 1 0 to 1 2017: 2016: (3) Times interest earned. Times Interest Earned 1 Choose Denominator: Choose Numerator: = Times Interest Earned Times interest earned times 2017: 2016: 1 1 times