(1) Debt and equity ratios. Debt Ratio Choose Numerator: Choose Denominator: Debt Ratio Total liabilities I Total equity Debt ratio 246,306 Is 324,692 = 75.9 % Current Year: 1 Year Ago: 0 % Equity Ratio Choose Numerator: Choose Denominator: Equity Ratio Equity ratio Current Year: 0 % 1 Year Ago:
(1) Debt and equity ratios. Debt Ratio Choose Numerator: Choose Denominator: Debt Ratio Total liabilities I Total equity Debt ratio 246,306 Is 324,692 = 75.9 % Current Year: 1 Year Ago: 0 % Equity Ratio Choose Numerator: Choose Denominator: Equity Ratio Equity ratio Current Year: 0 % 1 Year Ago:
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PB
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Question
Simon Company’s year-end balance sheets follow.
At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago | ||||||||
Assets | |||||||||||
Cash | $ | 34,026 | $ | 39,379 | $ | 39,798 | |||||
98,617 | 68,224 | 53,063 | |||||||||
Merchandise inventory | 120,309 | 91,975 | 57,666 | ||||||||
Prepaid expenses | 10,957 | 10,544 | 4,602 | ||||||||
Plant assets, net | 307,089 | 282,118 | 255,071 | ||||||||
Total assets | $ | 570,998 | $ | 492,240 | $ | 410,200 | |||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 142,179 | $ | 81,525 | $ | 53,063 | |||||
Long-term notes payable secured by mortgages on plant assets |
104,127 | 112,083 | 88,841 | ||||||||
Common stock, $10 par value | 162,500 | 162,500 | 162,500 | ||||||||
162,192 | 136,132 | 105,796 | |||||||||
Total liabilities and equity | $ | 570,998 | $ | 492,240 | $ | 410,200 | |||||
The company’s income statements for the Current Year and 1 Year Ago, follow.
For Year Ended December 31 | Current Yr | 1 Yr Ago | ||||||||||
Sales | $ | 742,297 | $ | 585,766 | ||||||||
Cost of goods sold | $ | 452,801 | $ | 380,748 | ||||||||
Other operating expenses | 230,112 | 148,199 | ||||||||||
Interest expense | 12,619 | 13,473 | ||||||||||
Income tax expense | 9,650 | 8,786 | ||||||||||
Total costs and expenses | 705,182 | 551,206 | ||||||||||
Net income | $ | 37,115 | $ | 34,560 | ||||||||
Earnings per share | $ | 2.28 | $ | 2.13 | ||||||||
For both the Current Year and 1 Year Ago, compute the following ratios:
(1) Debt and equity ratios.
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