Required information Exercise 17-9 Risk and capital structure analysis LO P3 [The following information applies to the questions displayed below.j Simon Company's year-end balance sheets follow At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets 2017 2016 2015 $ 31,800 35,625 $ 37,800 50,200 54,000 5,000 278,500 255,000 230, 500 $523,000 $445,000 377,500 62,500 112,500 82,50 9,375 89, 500 10,700 Liabilities and Equity Accounts payable Long-term notes payable secured by $129,900 75,250 $ 51,250 mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 83,500 163,500 163,500 163, 500 79,250 $523,000 445,000 377,500 98,500 101,500 131,100 104, 750 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 2017 2016 $673,500 $ 532,000 $411,225 209,550 12,100 9,525 $ 345,500 134,980 13,300 8,845 642,400 $31,100 $ 1.90 502,625 $ 29,375 $1.80 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 17-9 Part 1 (1) Debt and equity ratios. Choose Numerator: Choose Denominator: - Debt Ratio Debt ratio 2017: 2016: Equity Ratio Equity Ratio | Equity ratio Choose Numerator: l Choose Denominator: 2017: 2016: Calculate the company's long-term risk and capital structure positions at the end of 2017 and 2016 by computing the following ratios. Exercise 17-9 Part 2 (2) Debt-to-equity ratio. Debt-To-Equity Ratio Choose Denominator: Choose Numerator: - Debt-To-Equity Ratio Debt-to-equity ratio 2017: 0 to 1 2016: 0 to 1 Calculate the company's long-term risk and capital structure positions at the end of 2017 and 2016 by computing the following ratios. Exercise 17-9 Part 3 (3) Times interest earned. Times Interest Earned Choose Numerator: Choose Denominator: - Times Interest Earned = | Times interest earned 2017: times 2016 times