Required information

Exercise 13-9 Risk and capital structure analysis LO P3

[The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow.

At December 31	2017			2016			2015
Assets
Cash	$	30,108		$	34,838		$	35,927
Accounts receivable, net		89,025			60,344			49,368
Merchandise inventory		108,607			83,029			51,531
Prepaid expenses		9,892			9,238			4,033
Plant assets, net		277,826			256,911			229,441
Total assets	$	515,458		$	444,360		$	370,300
Liabilities and Equity
Accounts payable	$	132,200		$	74,346		$	49,368
Long-term notes payable secured by mortgages on plant assets		96,906			102,203			80,200
Common stock, $10 par value		162,500			162,500			162,500
Retained earnings		123,852			105,311			78,232
Total liabilities and equity	$	515,458		$	444,360		$	370,300

The companys income statements for the years ended December 31, 2017 and 2016, follow.

For Year Ended December 31	2017						2016
Sales				$	670,095					$	528,788
Cost of goods sold	$	408,758					$	343,712
Other operating expenses		207,729						133,783
Interest expense		11,392						12,162
Income taxes		8,711						7,932
Total costs and expenses					636,590						497,589
Net income				$	33,505					$	31,199
Earnings per share				$	2.06					$	1.92

Calculate the companys 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.

Exercise 13-9 Part 2

(2) Debt-to-equity ratio.

Exercise 13-9 Part 3

(3) Times interest earned.

Days' Sales In Inventory Choose Numerator: 1 Choose Denominator: x Days = | = Days' Sales In Inventory Days' sales in inventory o days 0 days 2017: 2016: Debt-To-Equity Ratio 7 Choose Denominator: Choose Numerator: - Debt-To-Equity Ratio Debt-to-equity ratio 0 to 1 0 to 1 2017: 2016: Times Interest Earned 1 Choose Denominator: Choose Numerator: = Times Interest Earned Times interest earned times 2017: 2016: times