Question

Required Information Exercise 13-9 Risk and capital structure analysis LO P3 [The following information applies to the questions displayed below) Simon Company's year-end balance sheets follow. Accounts receivable, et Merchandise inventory $ 37,084 541.647 $42.17 182,211 75,114 55,569 112,65 95,7 61,012 11,591 11,7 4.679 5616,211 $531,215 5 434, Plant assets, net Total assets Liabilities and Equity Long-ters notes payable secured by mortgages on plantas Contact S ale Retained earnings Total abilities and culty $154,971 $ 87,2 57,863 117,00 182, 120,958 182, see 100.625 93,037 162,50 120.02 The company's income statements for the years ended December 31, 2017 and 2016. follow O Cost of goods sold perating expenses 13.618 Income to Total costs and expenses Net income Earnings per share Calculate the company's long-term risk and capital structure positions at the end of 2017 and 2016 by computing the following ratios Exercise 13-9 Part 2 21 Debt-to-equity ratio Accounta ble

Answer 1

Answer to Question 10. Choose Numerator Total Liabilities 271,977 208,040 1 / / / Debt to Equity Ratio Choose Denominator = Total Equity 344,234 323,176 Debt to Equity Ratio Debt to Equity Ratio 0.79 to 1 0.64 to 1 2017 2016 Total Liabilities = Accounts Payable + Long Term Notes Payable Total Equity = Common Stock + Retained Earnings Times Interest Earned Answer to Question 11. Times Interest Earned Choose Choose Numerator Denominator Income before Interest and Income Tax / Interest Expense 2017 64,086 / 13,618 = 2016 61,318 / 14,539 Times Interest Earned 4.71 Times 4.22 Times Income before Interest and Income Tax = Sales - Cost of Goods Sold - Other Operating Expenses