Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Simon Company's year-end balance sheets follow. 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 Common stock, $10 par value Retained earnings Current Year 1 Year Ago 2 Years Ago $ 25,067 74,832 88,606 8,234 228,130 $ 424,869 $ 107,908 80,674 163,500 72,787 $ 29,301 52,303 68,437 7,461 208,764 $ 366,266 $ 62,518 85,926 162,500 55,322 $ 29,319 38,694 43,342 3,224 187,621 $ 302,200 $ 40,289 66,786 162,500 32,625 $ 302,200 Total liabilities and equity $ 424,869 $ 366,266 For both the current year and one year ago, compute the following ratios: The company's income statements for the current year and one 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 (1) Debt and equity ratios. Current Year $ 336,921 171,222 9,390 7,180 1 Year Ago $ 552,330 $ 435,857 $ 283,307 110,272 10,025 6,538 524,713 410,142 $ 25,715 $ 1.58 $ 27,617 $ 1.70 (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? Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3A Required 3B Compute debt-to-equity ratio for the current year and one year ago. Debt-To-Equity Ratio Current Year: 1 Year Ago: Numerator: 1 Denominator: = Debt-To-Equity Ratio = Debt-to-equity ratio 1 1 = to 1 = to 1 < Required 1 Required 2B > Simon Company's year-end balance sheets follow. 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 Common stock, $10 par value Retained earnings Current Year 1 Year Ago 2 Years Ago $ 25,067 74,832 88,606 8,234 228,130 $ 424,869 $ 107,908 80,674 163,500 72,787 $ 29,301 52,303 68,437 7,461 208,764 $ 366,266 $ 62,518 85,926 162,500 55,322 $ 29,319 38,694 43,342 3,224 187,621 $ 302,200 $ 40,289 66,786 162,500 32,625 $ 302,200 Total liabilities and equity $ 424,869 $ 366,266 For both the current year and one year ago, compute the following ratios: The company's income statements for the current year and one 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 (1) Debt and equity ratios. Current Year $ 336,921 171,222 9,390 7,180 1 Year Ago $ 552,330 $ 435,857 $ 283,307 110,272 10,025 6,538 524,713 410,142 $ 25,715 $ 1.58 $ 27,617 $ 1.70 (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? Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Required 3A Required 3B Compute debt-to-equity ratio for the current year and one year ago. Debt-To-Equity Ratio Current Year: 1 Year Ago: Numerator: 1 Denominator: = Debt-To-Equity Ratio = Debt-to-equity ratio 1 1 = to 1 = to 1 < Required 1 Required 2B >
Expert Answer:
Answer rating: 100% (QA)
First lets calculate the debttoequity ratio for both the current year and one year ago The debttoequ... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
Computing Missing Amounts on a Classified Balance Sheet The consolidated balance sheet of Mutron Lock Inc. follows. For each of the missing items a through m, determine the balances that appear on...
-
what do you think about delegation in nursing ? 2-What is delegation in nursing? 3-What are the important aspects of delegation in nursing? 4- Give 4 examples about delegation in nursing and explain...
-
The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: For how much money must the other assets...
-
NO catalyzes the decomposition of N2O, possibly by the following mechanism: NO(g) + N2O(g) N2(g) + NO2(g) 2 NO2(g) 2 NO(g) + O2(g) (a) What is the chemical equation for the overall reaction? Show...
-
A decedent's interest and taxes are deductible on both Forms 706 and 1041 only if: A. The decedent's will did not provide instructions. B. Either item is a deduction in respect of a decedent (DRD)....
-
A game of chance based on a spinning wheel is available that pays \(n\) times money bet in the case of a win and nothing in the case of a loss. A gambler has developed a device by which he may...
-
The Ride- On- Wonder Company (ROW) produces a line of non-motorized boats. ROW uses a normal- costing system and allocates manufacturing overhead using direct manufacturing labor cost. The following...
-
A company applies overhead at a rate of 1 5 5 % of direct labor cost. Actual overhead cost for the current period is $ 8 2 5 , 0 0 0 , and direct labor cost is $ 5 0 0 , 0 0 0 . Determine whether...
-
Calculate the following variances and indicate whether each variance is favorable or unfavorable: 1. Volume Variance 2. Total Variance Expected Treatments= 1,000 Standard Cost Profile Lab Treatment...
-
consider the block diagram shown in the next figure. Determine appropriate value for KI and K2 to achieve overshoot 25% and settling time of 5 second for unit step input. R(s) EU) Amp K a) c) kl 0.17...
-
Describe the quantity discount model and solve typical problems.
-
Discuss the advantages of using PERT and potential sources of error.
-
Describe reorder point models and solve typical problems.
-
Evaluate Formula 2.18 when \(s=1\), and explain the result.
-
Suppose you currently have $2,000 and plan to purchase a 3-year certificate of deposit (CD) that pays 4% interest compounded annually. How much will you have when the CD matures? How would your...
-
KNJ Companies is preparing to pay dividends of $.52, $.60, and $.75 a share over the next three years, respectively. After that, the annual dividend will be $1.10 per share indefinitely. What is this...
-
Using the information presented in Problem 13.4B, prepare a partial statement of cash flows for the current year, showing the computation of net cash flows from operating activities using the...
-
The speeds of cars as they pass the center of the Golden Gate Bridge. State whether the data described are discrete or continuous and explain why?
-
Number of stars in each galaxy in the universe. State whether the data described are discrete or continuous and explain why?
-
The numerical scores on a statistics test. State whether the data described are discrete or continuous and explain why?
Study smarter with the SolutionInn App