Required information

Exercise 13-9 Analyzing risk and capital structure LO P3

[The following information applies to the questions displayed below.] Simon Companys year-end balance sheets follow.

At December 31	Current Yr					1 Yr Ago			2 Yrs Ago
Assets
Cash		$	34,120			$	40,706		$	42,402
Accounts receivable, net			105,008				71,235			57,666
Merchandise inventory			126,900				94,132			59,602
Prepaid expenses			11,441				11,009			4,758
Plant assets, net			318,725				296,878			263,872
Total assets		$	596,194			$	513,960		$	428,300
Liabilities and Equity
Accounts payable		$	151,421			$	85,122		$	55,405
Long-term notes payable secured by mortgages on plant assets			114,326				121,757			97,494
Common stock, $10 par value			162,500				162,500			162,500
Retained earnings			167,947				144,581			112,901
Total liabilities and equity		$	596,194			$	513,960		$	428,300

The companys income statements for the Current Year and 1 Year Ago, follow.

For Year Ended December 31	Current Yr						1 Yr Ago
Sales				$	775,052					$	611,612
Cost of goods sold	$	472,782					$	397,548
Other operating expenses		240,266						154,738
Interest expense		13,176						14,067
Income tax expense		10,076						9,174
Total costs and expenses					736,300						575,527
Net income				$	38,752					$	36,085
Earnings per share				$	2.38					$	2.22

For both the Current Year and 1 Year Ago, compute the following ratios:

Exercise 13-9 Part 1

(1) Debt and equity ratios.

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