Required information Exercise 13-9 Analyzing risk and capital structure LOP3 [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 $ 29,346 85,053 106,938 9,263 261,862 $492, 462 $ 33,963 $ 35, 382 59,435 48,605 77,754 52,287 8,915 3,931 244,469 220,795 $ 424,536 $ 361,000 $123,849 $ 72,464 $ 48,605 92,583 162,500 113,530 $ 492, 462 95,690 80,579 162,500 162,500 93,882 69,316 $ 424,536 $ 361,000 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 $640,201 $390,523 198, 462 10,883 8, 323 608,191 $ 32,010 1 Yr Ago $ 505,198 $328, 379 127,815 11,620 7,578 475, 392 $ 29,806 Earnings per share $ 1.97 $ 1.83 1) Debt and equity ratios. Debt Ratio Choose Numerator: Choose Denominator: Debt Ratio = Debt ratio Current Year: / / / 1 Year Ago: = % Equity Ratio Choose Numerator: Choose Denominator: Equity Ratio Equity ratio % Current Year: 1 Year Ago: = % 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 Current Year: / 0 to 1 1 Year Ago: II 0 to 1