Simon Company's year-end balance sheets follow. At December 31 Assets Current Ye 1 Ye Ago 2 Yrs Ago $ 31,800 $ 35,625 $ 37,800 Cash Accounts receivable, net Merchandise inventory Prepaid expenses 89,500 112,500 10,700 62,500 50,200 82,500 $4,000 9,375 5,000 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 278,500 255,000 230,500 $523,000 $445,000 $377,500 $129,900 $ 75,250 $ 51,250 98,500 163,500 101,500 83,500 163,500 163,500 131,100 104,750 79,250 $523,000 $445,000 $377,500 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 Current Yr $673,500 $411,225 209,550 12,100 9,525 642,400 $ 31,100 1 Yr Ago $345,500 134,980 13,300 8,845 $532,000 502,625 $ 29,375 Lasn 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 1,000 37,000 89,500 62,500 50,200 112,500 82,500 54,000 10,700 278,500 255,000 230,500 9,375 5,000 $523,000 $445,000 $377,500 $129,900 $75,250 $ 51,250 98,500 101,500 163,500 83,500 163,500 79,250 163,500 131,100 104,750 $523,000 $445,000 $ 377,500 The company's income statements for the current year and 1 year ago, follow. 1 Yr Ago For Year Ended December 31 Sales Current Ye $673,500 $532,000 Cost of goods sold $411,225 $345,500 Other operating expenses 209,550 Interest expense 12,100 Income tax expense 9,525 Total costs and expenses 642,400 Net income $ 31,100 134,980 13,300 8,845 502,625 $ 29,375 Earnings per share. $ 1.90 $ 1.80 For both the Current Year and 1 Year Ago, compute the following ratios (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 3A Required 3B Times Interest earned. Current Year: 1 Year Ago: Choose Numerator: Income before interest and income tax Times Interest Earned Choose Denominator: Interest expense Times Interest Earned Times interest earned $ 12,100= $ 13,300= times times Required M Required 38 >