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Simon Company's year - end balance sheets follow. At December 3 1 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 3 0

Simon Company's year-end balance sheets follow.
At December 31 Current Year 1 Year Ago 2 Years Ago
Assets
Cash $ 30,268 $ 34,694 $ 34,729
Accounts receivable, net 84,32061,91645,843
Merchandise inventory 106,01680,22948,319
Prepaid expenses 9,4648,8373,859
Plant assets, net 268,012243,703218,050
Total assets $ 498,080 $ 429,379 $ 350,800
Liabilities and Equity
Accounts payable $ 125,262 $ 72,565 $ 45,379
Long-term notes payable 91,76698,75779,853
Common stock, $10 par value 162,500162,500162,500
Retained earnings 118,55295,55763,068
Total liabilities and equity $ 498,080 $ 429,379 $ 350,800
For both the current year and one year ago, compute the following ratios:
The companys income statements for the current year and one year ago, follow.
For Year Ended December 31 Current Year 1 Year Ago
Sales $ 647,504 $ 510,961
Cost of goods sold $ 394,977 $ 332,125
Other operating expenses 200,726129,273
Interest expense 11,00811,752
Income tax expense 8,4187,664
Total costs and expenses 615,129480,814
Net income $ 32,375 $ 30,147
Earnings per share $ 1.99 $ 1.86
(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?

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