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 $31.899 $35.625 $ 37.899 89,500 62.5ee 5 0.200 112,500 82,509 54, 10.700 9.375 5,00 278,5ee 255,eee 230,500 $523,000 $445,000 $ 377,500 $129,900 $ 75,250 $ 51,250 98,500 101,500 83,500 163. see 163,500 163,500 131, 100 184,750 79,250 $523,000 $445,288 $ 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 expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 $673,500 $411,225 209,550 12,100 9,525 642,480 $31.1ee 2016 $ 532,000 $ 345,500 134,989 13, 380 8,845 5e2,625 $ 29.375 $ 1.0 1.80 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 1 (1) Debt and equity ratios. Debt Ratio Choose Denominator: Choose Numerator: = Debt Ratio Debt ratio 2017: 2016: Equity Ratio Choose Denominator: Choose Numerator = = Equity Ratio Equity ratio 2017: 2016: Required Information 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 $ 31,800 $ 35,625 $ 37,899 89,500 62.see 50.299 112,500 82,509 54,000 19.799 9.375 5.099 278,580 255,680 230,500 $523,000 $445,00 $ 377,500 $129,999 $ 75,250 $ 51,250 98,500 101,500 83,500 163,500 163,500 163,500 131, 180 184,750 79,250 $523,000 $445,690 $ 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 expenses Interest expense Income taxes Total costs and expenses Net income 2017 $673,500 $411, 225 209.550 12.10 9,525 642,400 $ 31,188 $ 1.99 2016 $ 532,000 $345,500 134.982 13, 30e 8,845 502,625 $ 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. Debt-To-Equity Ratio Choose Denominator: Choose Numerator: = Debt-To-Equity Ratio Debt-to-equity ratio 2017: 2016: Required Information 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 $ 31,800 $ 35,625 $ 37,899 89.509 62.599 5 9.299 112,500 82,589 54,80 19,799 9,375 5,000 278,580 255,290 230,500 $523,000 $445,200 $ 377,500 $129,900 $ 75,250 $ 51,250 98,500 101,589 83,500 163,500 163, see 163.500 131,180 184,750 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 expenses Interest expense Income taxes Total costs and expenses Net income 2017 $673,500 $411,225 209,550 12.198 9.525 642,480 $ 31,180 $ 1.99 2016 $ 532, $ 345,500 134,989 13,300 8,845 5e2,625 $ 29,375 Earnings per share $ 1.80 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 3 (3) Times interest earned. Times Interest Earned 7 Choose Denominator: Choose Numerator: = Times Interest Earned Times interest earned 2017: 2016