13 7 a and b Exercise 13-10 (Algo) Analyzing risk and capital structure LO P3[The following information applies to the questions displayed below.]Simon Company's year-end balance sheets follow.At December 31Current Yr1 Yr Ago 2 Yrs AgoAssets$ 31,79086,769111,34510,138283,072$523,114$ 37,159 $ 36,08863,13481,7599,375259,533$ 450,960 $ 375,800CashAccounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, net49, 60653,3644,092232,650Total assetsLiabilities and EquityAccounts payableLong-term notes payableCommon stock, $10 par valueRetained earnings$128,953101,296162,500130,365$523,114$ 74,688 $ 51,094104,758162,50083,052162, 50079,154$ 450,960 $ 375,800109,014Total liabilities and equityThe company's income statements for the current year and one year ago, follow.For Year Ended December 31Current Yr1 Yr AgoSales$680,048$ 536,642Cost of goods soldOther operating expensesInterest expenseIncome tax expenseTotal costs and expenses$414,829210,81511,5618,841$348,817135,77012,3438,050646,046$ 34,002504,980$ 31,662Net incomeEarnings per share$2.09$1.95For both the current year and one year ago, compute the following ratios: (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 3ARequired 3BTimes interest earned.Times Interest EarnedChoose Numerator:Choose Denominator:Times Interest Earned%3DTimes interest earnedCurrent Year:times1 Year Ago:timesRequired 3ARequired 3B >

EBIT = Net income + Income tax expense + Interest expense Current year = 34,002 + 8,841 + 11,561 =…

(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 3A Required 3B Times interest earned. Times Interest Earned Choose Numerator: Choose Denominator: Times Interest Earned %3D Times interest earned Current Year: times %3D 1 Year Ago: times %3D Required 3A Required 3B

(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 3A Required 3B Times interest earned. Times Interest Earned Choose Numerator: Choose Denominator: Times Interest Earned %3D Times interest earned Current Year: times %3D 1 Year Ago: times %3D Required 3A Required 3B

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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