Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Simon Companys year-end balance sheets follow. At December 31 Current Year 1 Year Ago 2 Years Ago Assets Cash $ 36,393 $ 40,062 $ 44,765

Simon Companys year-end balance sheets follow.

At December 31 Current Year 1 Year Ago 2 Years Ago
Assets
Cash $ 36,393 $ 40,062 $ 44,765
Accounts receivable, net 102,406 73,000 57,948
Merchandise inventory 126,181 95,509 62,961
Prepaid expenses 11,151 10,950 4,877
Plant assets, net 322,735 296,743 268,449
Total assets $ 598,866 $ 516,264 $ 439,000
Liabilities and Equity
Accounts payable $ 149,118 $ 86,376 $ 56,210
Long-term notes payable 112,587 122,303 94,108
Common stock, $10 par value 162,500 162,500 162,500
Retained earnings 174,661 145,085 126,182
Total liabilities and equity $ 598,866 $ 516,264 $ 439,000

The companys income statements for the current year and one year ago, follow.

For Year Ended December 31 Current Year 1 Year Ago
Sales $ 778,526 $ 614,354
Cost of goods sold $ 474,901 $ 399,330
Other operating expenses 241,343 155,432
Interest expense 13,235 14,130
Income tax expense 10,121 9,215
Total costs and expenses 739,600 578,107
Net income $ 38,926 $ 36,247
Earnings per share $ 2.40 $ 2.23

For both the current year and one year ago, compute the following ratios:

(1) Compute debt and equity ratio for the current year and one year ago.

(2) Compute debt-to-equity ratio for the current year and one year ago.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Complete Guide

Authors: Gerardus Blokdyk

2023rd Edition

1038805538, 978-1038805539

More Books

Students also viewed these Accounting questions

Question

workflow oriented business process definition

Answered: 1 week ago