Required information Exercise 17-9 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, $10 par value Retained earnings Total liabilities and equity $ 26,453 $ 30,321 $ 31,591 74,437 52,537 42,964 93,590 70,812 45,312 8,436 8,117 3,615 232,388 213,475 195,618 $435,304 $375,262 $ 319, 100 $110,559 $ 64,688 $ 41,700 81,019 88,900 162,500 162,500 81,22659,174 $435,304 $375,262 71,932 162,500 42,968 $319,100 The company's income statements for the years ended December 31, 2017 and 2016, follow. 2017 $565,895 For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income $ 345,196 175,427 9,620 7,357 2016 $ 446,562 $ 290, 265 112,980 10,271 6.698 420,214 $ 26,348 $ 1.62 537,600 $ 28, 295 1.74 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: Total liabilities 2017: S 2016: Debt Ratio 1 Choose Denominator: Debt Ratio 1 Total assets Debt ratio 191,578 $ 435,304 = 44.0 is 375,262 = Equity Ratio Choose Denominator: - Equity Ratio Total assets Equity ratio I s 435,304 S 375,262 Choose Numerator: Total equity 2017: 2016: kercise 17-9 Part 2 Debt-to-equity ratio. Debt-To-Equity Ratio Choose Denominator Choose Numerator: Debt-To-Equity Ratio Debt-to-equity ratio 0 to 1 0 to 1 = 017: 016