Required information 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 $ 27,865 79, 179 100,548 8,622 246, 821 $463,035 $ 31,933 $ 33,264 57,001 45,239 73, 108 47,712 8,383 3,622 228, 743 206,163 $ 399, 168 $ 336,000 $115, 296 $ 66,785 $ 44,796 88,792 162,500 96,447 $463,035 92,727 72,771 162,500 162,500 77, 156 55,933 $ 399,168 $336,000 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 $601,946 $367, 187 186,603 10,233 7,825 571, 848 $ 30,098 1 Yr Ago $475,010 $308,757 120, 178 10,925 7, 125 446,985 $ 28,025 $ 1.72 Earnings per share $ 1.85 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: Choose Denominator: Debt Ratio = Debt ratio 1 1 1 1 Current Year: II 0 % 1 Year Ago: II 0 % Equity Ratio Choose Numerator: 1 Choose Denominator: = Equity Ratio Equity ratio Current Year: 1 1 1 0 % 1 Year Ago: 0 % 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 to 1 / / / Current Year: 1 Year Ago: = 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: Choose Denominator: Times Interest Earned Times interest earned Current Year: 1 times 1 Year Ago: / times