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 2017 2016 2015 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, 518 par value Retained earnings Total liabilities and equity $ 32,487 $ 37,591 $ 39,157 96,960 65,113 54, 341 117, 190 90,477 56,738 10,356 9,968 4,351 380,100 276,328 249,013 $556,193 $479,477 5 403,600 $141,262 $ 78,61 5 53,275 104,564 111,383 86,520 162,500 162,500 162,500 147,867 126,993 101,385 $556,193 $479,427 403,600 The company's income statements for the years ended December 31, 2017 and 2016, follow. 2017 5723.051 For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 224,146 12,292 9.400 686,899 5 36,152 $ 2.22 2016 5 570,578 $370,875 144, 356 13,123 2.559 536,914 $ 33,664 $ 2.07 Calculate the somnany's Inn The company's income statements for the years ended December 31, 2017 and 2016 follow For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 5723,051 $441,861 224,146 12,292 9,409 686,899 $36,152 $ 2.22 2016 5 570,578 $370,876 144,356 13,123 8,559 536,914 $ 33,664 $ 2.97 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 Answer is not complete. Debt Ratio Choose Denominator: Total assets 414 931 $ 556 1953 Choose Numerator Total liabilities $ - 2017: Debt Ratio Debt ratio 74.6 2016: 0 % Choose Numerator Equity Ratio Choose Denominator: 2017: Equity Ratio Equity ratio 2016: 0 90 0 % mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 104,564 111,383 86,520 162,50 162.500 162,500 147,867 126,993 101,305 $556,193 $479,477 $ 403,600 The company's income statements for the years ended December 31, 2017 and 2016, follow For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 $723,051 $441,061 224,146 12.292 9,400 686,899 $36/152 2016 $ 570,578 5378,876 144,356 13,123 8,559 536,914 $ 33,664 $ 2.07 $ 2022 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 2 (2) Debt-to-equity ratio Choose Numerator: Debt To Equity Ratio Choose Denominator: Debt To Equity Ratio Debt-to-equity ratio 0 to 1 2017: 2016: 0 to 1 mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 104,564 111,383 86,520 162,500 162,50 162,580 147,867 126,993 101, 305 $556,193 $479,477 $ 403,600 The company's income statements for the years ended December 31, 2017 and 2016. follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 $723,951 $441,061 224,146 12,292 9,400 686,899 $ 36,152 $ 2.22 2016 $ 578,578 $370,876 144,356 13,123 8,559 536,914 $ 33,664 $ 2.07 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 3 (3) Times interest earned Choose Numerator: Times Interest Farned Choose Denominator: -- 2017: 7 Times Interest Earned Times interest earned times times 2016