Exercise 13-9 Analyzing risk and capital structure LO P3

Exercise 13-9 Part 2

If possible, please show the formulas you used so I can better learn how to answer these type of problems. Thank you for your help.

Simon Company's year-end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs Ago At December 31 Assets Cash 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 $ 24,709 73,076 92,798 8,038 228,722 $427, 343 $ 29,177 $ 30,700 53,123 40,933 68,154 42,713 7,659 3,513 210,286 192,241 $ 368,399 $ 310,100 $105,344 $ 62,882 $ 42,161 81,144 162,500 78,355 $427,343 83,037 67,847 162,500 162,500 59,980 37,592 $ 368,399 $ 310,100 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 Earnings per share Current Yr $555,546 $338,883 172,219 9,444 7,222 527,768 $ 27,778 $ 1.71 1 Yr Ago $ 438,395 $ 284,957 110,914 10,083 6,576 412,530 $ 25,865 $ 1.59 (2) Debt-to-equity ratio. II Debt-To-Equity Ratio Choose Numerator: Choose Denominator: Total liabilities 1 Total equity ! Debt-To-Equity Ratio Debt-to-equity ratio 0 to 1 Current Year: 1 Year Ago: 111111 / 0 to 1