Required information [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs Ago 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 $ 28,633 82,986 105,383 9,497 258,802 $485, 301 $ 32,800 $ 33,500 57,985 46,020 76,623 48,536 8,522 3,797 242,433 209,947 $ 418,363 $ 341,800 $124,465 $ 72,117 $ 44,215 89,412 162,500 108,924 $ 485,301 97,186 77,049 162,500 162,500 86,560 58,036 $ 418,363 $ 341,800 The company's income statements for the Current Year and 1 Year Ago, follow. For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income tax expense Total costs and expenses Net income Earnings per share Current Yr $630,891 $384, 844 195,576 10,725 8,202 599,347 $ 31,544 $ 1.94 1 Yr Ago $ 497,852 $323,604 125,957 11,451 7,468 468,480 $ 29, 372 $ 1.81 For both the Current Year and 1 Year Ago, compute the following ratios: (1) Debt and equity ratios. Debt Ratio 1 Choose Numerator: Choose Denominator: Debt Ratio Debt ratio % 11 Current Year: 1 Year Ago: % 11 Equity Ratio 1 Choose Denominator: 1 Choose Numerator: = Equity Ratio Equity ratio = % Current Year: % 11 1 Year Ago: (2) Debt-to-equity ratio. Debt-To-Equity Ratio Choose Numerator: 1 Choose Denominator: 1 1 11 Debt-To-Equity Ratio Debt-to-equity ratio 0 to 1 Current Year: = 1 Year Ago: 11 oto 1 Required 3A Required 3B Times interest earned. Times Interest Earned Choose Numerator: 1 Choose Denominator: 1 Times Interest Earned Times Interest earned ! = times Current Year: 1 Year Ago: 1 times Recured a Required 3B > Required 3A Required 3B Based on times interest earned, is the company more or less risky for creditors in the Current Year versus 1 Year Ago? Times interest earned