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 Liabilities and Equity Accounts payable $ 37,673 Current Year 1 Year Ago 2 Years Ago $31,552 97,105 $ 37,262 67,204 88,806 10,280 271,727 114,979 10,685 297,003 $ 475,279 $ 551,324 $ 140,025 Long-term notes payable. 103,649 Common stock, $10 par value 162,500 145,150 $ 80,322 107,128 162,500 125, 329 Total liabilities and equity $551,324 $ 475,279 Retained earnings For both the current year and one year ago, compute the following ratios: 52,281 55,690 4,314 238,342 $ 388,300 $ 50,230 84,956 162,500 90,614 $ 388,300 5 The company's income statements for the current year and one year ago, follow. Other operating expenses For Year Ended December 31 Sales Cost of goods sold Interest expense Current Year 1 Year Ago $ 716,721 $ 565,582 $437,200 $ 367,628 222,184 143,092 12,184 13,008 Income tax expense 9,317 8,484 Total costs and expenses Net income 680,885 $35,836 Earnings per share $2.21 532,212 $33,370 $2.05 (1) Debt and equity ratios. ces (2-0) 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? Required 1 of 51 Required 2A Required 2B Required 3A Required 3B Compute debt and equity ratio for the current year and one year ago. Debt Ratio Numerator: Total liabilities ok Current Year: 1 Year Ago: int ences Equity Ratio Numerator: Total equity Current Year: 1 Year Ago: Denominator: Debt Ratio Total assets = Debt ratio = 0 % 0 % Denominator: Equity Ratio: Total assets = Equity ratio = = 0 % 0% Required 1 Required 2A Required 2B Required 3A Required 3B Compute debt-to-equity ratio for the current year and one year ago. Current Year: 1 Year Ago: Numerator: Debt-To-Equity Ratio Denominator: =Debt-To-Equity Ratio Debt-to-equity ratio 0 to 1 10 to 1 < Required 1 Required 2B > Based on debt-to-equity ratio, does the company have more or less debt in the current year versus one year ago? Based on debo-equity ratio, the company has debt in the current year versus one year ago. < Required 2A Required 3A > Required 1 Required 2A Required 28 Required 3A Required 38 Compute times interest earned for the current year and one year ago. Current Year: 1 Year Ago: Numerator: Times Interest Earned Denominator: 7 7 < Required 28 Required 3B > Times Interest Earned = Times interest eamed = 0 times T 0 times bok Hot Required 1 Required 2A Required 2B Required 3A Required 38 nt ences 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 eamed, the company is for creditors in the current year versus one year ago