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. 2016 At December 31 2017 2015 Assets $32,906 $ 38,464 $ 40,877 Cash Accounts receivable, net Merchandise inventory 99,265 68,000 53,968 126,031 91,672 58,056 Prepaid expenses 10,921 9,994 4,497 Plant assets, net 299,994 282,488 247,402 $569,117 $490,618 $404,800 Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by $ 51,831 $141,710 $ 82,085 mortgages on plant assets Common stock, $10 par value Retained earnings 108,064 116,227 92,145 162,500 162,500 162,500 156,843 98,324 129,806 Total liabilities and equity $569,117 $490,618 $404 ,800 The company's income statements for the years ended December 31, 2017 and 2016, follow. For Year Ended December 31 2017 2016 Sales $739,852 $583,835 $ 451,310 $379,493 Cost of goods sold Other operating expenses 229,354 147,710 Interest expense 12,577 13,428 Income taxes 9,618 8,758 Total costs and expenses 702,859 549,389 Net income $36,993 $34,446 S 2.28 2.12 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 1 (1) Debt and equity ratios. Debt Ratio IChoose Denominator: Choose Numerator: Debt Ratio / Debt ratio % 2017: / % 2016: Equity Ratio IChoose Denominator: Equity Ratio Choose Numerator: Equity ratio = 2017 % - 2016: % Exercise 13-9 Part 2 (2) Debt-to-equity ratio. Debt-To-Equity Ratio Debt-To-Equity Ratio Choose Numerator: Choose Denominator: / Debt-to-equity ratio / 2017: to 1 2016: to 1 Exercise 13-9 Part 3 (3) Times interest earned Times Interest Earned IChoose Denominator: Choose Numerator: Times Interest Earned / Times interest earned times 2017: times 2016