Required information [The following information applies to the questions displayed below. Simon Company's year-end balance sheets follow. Current Year 1 Year Ago 2 Years Ago $ 35,962 104,229 133, 722 11,581 336, 471 $ 621,965 $ 42,894 75,815 96,217 11,598 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 Common stock, $10 par value Retained earnings Total liabilities and equity $ 43,376 57, 262 62,216 4,772 266,174 $ 433,800 309,653 $ 536,177 $ 157,967 113,422 163,500 187,076 $ 621,965 $ 90,614 124,554 162,500 158, 509 $ 536,177 $ 56,116 97,787 162,500 117,397 $ 433,800 For both the current year and one year ago, compute the following ratios: The company's income statements for the current year and one 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 Current Year $ 808,555 $ 493,219 250,652 13,745 10,511 768, 127 $ 40,428 1 Year Ago $ 638,051 $ 414,733 161,427 14,675 9,571 600,406 $ 37,645 Earnings per share $ 2.49 $ 2.32 The company's income statements for the current year and one 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 Current Year $ 808,555 $ 493,219 250,652 13,745 10,511 768,127 $ 40,428 1 Year Ago $ 638,051 $ 414,733 161,427 14,675 9,571 600,406 $ 37,645 Earnings per share $ 2.49 $ 2.32 (1) Debt and equity ratios. (2-a) Compute debt-to-equity ratio for the current year and one year ago. (2-b) Based on debt-to-equity ratio, does the company have more or less debt in the current year versus one year ago? (3-a) Times interest earned. (3-b) Based on times interest earned, is the company more or less risky for creditors in the Current Year versus 1 Year Ago? Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3A Required 3B Compute debt and equity ratio for the current year and one year ago. Debt Ratio Numerator: 1 Denominator: = Debt Ratio Total liabilities / Total assets = Debt ratio Current Year: 1 = 0 % 1 Year Ago: / 0 % Equity Ratio Numerator: 1 Denominator: / Total assets Equity Ratio Equity ratio Total equity = Current Year: = 0 % 1 1 1 Year Ago: = 0 % Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B 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? Based on times interest earned, the company is for creditors in the current year versus one year ago.
