Use the following information for the Exercises below. $($Algo$)$Required informationRequired informationExercise $17-9($Algo$)$ Analyzing risk and capital structure LO P$3$Use the following information for the Exercises below. $($Algo$)$

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Simon Company's year$-$end balance sheets follow.

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

Exercise $17-11($Algo$)$ Analyzing profitability LO P$3$

The company's income statements for the Current Year and $1$ Year Ago, follow.

Additional information about the company follows.

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

Return on equity.

Dividend yield.

$3$a$.$ Price$-$earnings ratio on December $31.$

b$.$ Assuming Simon's competitor has a price$-$earnings ratio of $7,$ which company has higher market expectations for future growth?

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Compute the return on equity for each year.

The company's income statements for the current year and one year ago, follow.

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

Use the following information for the Exercises below. $($Algo$)$

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Simon Company's year$-$end balance sheets follow.

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

Exercise $17-7($Algo$)$ Analyzing liquidity LO P$3$

$(1-$a$)$ Compute the current ratio for each of the three years.

$(1-$b$)$ Did the current ratio improve or worsen over the three$-$year period?

$(2-$a$)$ Compute the acid$-$test ratio for each of the three years.

$(2-$b$)$ Did the acid$-$test ratio improve or worsen over the three$-$year period?

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Compute the current ratio for each of the three years.

Use the following information for the Exercises below. $($Algo$)$

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Simon Company's year$-$end balance sheets follow.

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

Exercise $17-6($Algo$)$ Common$-$size percents LO P$2$

Express the balance sheets in common$-$size percents.

Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total

assets favorable or unfavorable?

Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total

assets favorable or unfavorable?

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Express the balance sheets in common$-$size percents.

Note: Do not round intermediate calculations and round your final percentage answers to $1$ decimal place.

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Simon Company's year$-$end balance sheets follow.

At December $31$ Current Year $1$ Year Ago $2$ Years Ago

Assets

Cash $ $27,815$ $ $32,849$ $ $33,882$

Accounts receivable, net $82,27957,48544,720$

Merchandise inventory $105,54175,18747,617$

Prepaid expenses $9,1428,8873,765$

Plant assets, net $261,249244,580215,716$

Total assets $ $486,026$ $ $418,988$ $ $345,700$

Liabilities and Equity

Accounts payable $ $122,231$ $ $71,517$ $ $45,632$

Long$-$term notes payable $91,37395,40475,636$

Common stock, $$10$ par value $162,500163,500163,500$

Retained earnings $109,92288,56760,932$

Total liabilities and equity $ $486,026$ $ $418,988$ $ $345,700$

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

Exercise $17-6($Algo$)$ Common$-$size percents LO P$2$

Express the balance sheets in common$-$size percents.

Assuming annual sales have not changed in the last three years, is the change in accounts receivable as a percentage of total assets favorable or unfavorable?

Assuming annual sales have not changed in the last three years, is the change in merchandise inventory as a percentage of total assets favorable or unfavorable?