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 $ 34,717 102,653 130,344 11,519 315,132 $594,365 $ 42,220 $ 43,126 71,016 58,640 96,687 60,020 10,545 4,697 291,916 264,817 $ 512,384 $ 431,300 $152,437 $ 87,459 $ 56,362 112,858 162,500 166,570 $594,365 114,313 95,317 162,500 162,500 148, 112 117, 121 $ 512,384 $ 431,300 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 Earnings per share Current Yr $772,675 $471,332 239,529 13,135 10,045 734,041 $ 38,634 1 Yr Ago $ 609,737 $ 396, 329 154,263 14,024 9,146 573,762 $ 35,975 $ 2.38 $ 2.21 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 1 Choose Numerator: Choose Denominator: 11 Debt Ratio Debt ratio % Current Year: 1 Year Ago: 11 % Choose Numerator: Choose Denominator: Equity Ratio 1 1 1 Equity Ratio Equity ratio 11 = Current Year: 1 Year Ago: % (2) Debt-to-equity ratio. Debt-To-Equity Ratio Choose Numerator: 1 Choose Denominator: 1 = Debt-To-Equity Ratio Debt-to-equity ratio to 1 11 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: 1 times 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 Based on times interest earned, is the company more or less risky for creditors in the Current Year versus 1 Year Ago? Times interest earned