(1) Debt and equity ratios.(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 3BCompute debt and equity ratio for the current year and one year ago.Debt RatioI//1Equity Ratio1""1Current Year:1 Year Ago:Current Year:1 Year Ago:Numerator:Numerator:Denominator:Denominator:=IIII||===Debt RatioDebt ratio%%Equity RatioEquity ratio%% Simon Company's year-end balance sheets follow.At December 31AssetsCashAccounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, netTotal assetsLiabilities and EquityAccounts payableLong-term notes payableCommon stock, $10 par valueRetained earningsTotal liabilities and equityCurrent Year$ 27,97080, 264100,9179,097251, 134$ 469,382$ 116,87690,891163,50098,115$ 469,382$ 372,220189,16110,3737,933For both the current year and one year ago, compute the following ratios:Current Year1 Year Ago$ 31,40058,34977,1048,412229,375$ 404,640Exercise 13-9 (Algo) Analyzing risk and capital structure LO P3$ 70,43692,137163,50078,567$ 404,640The company's income statements for the current year and one year ago, follow.For Year Ended December 31SalesCost of goods soldOther operating expensesInterest expenseIncome tax expenseTotal costs and expensesNet incomeEarnings per share$ 610,197579,687$ 30,510$1.882 Years Ago$ 312,989121,82511,0757,223$ 33,71745,40148,3613,635206,086$ 337,2001 Year Ago$ 45,84673,776163,50054,078$ 337,200$ 481,522453,112$ 28,410$ 1.75

Ratio Analysis -The ratio is the technique used by the prospective investor, an individual, or a strategist to read the company information in more detailed, end-accurate ways.Ratio immediately recognizes the Liquidity, Profitability, and Solvency of the company.By using ratio analysis comparison between two companies can also be done very easily and accurately.1. Debt Ratio - 2. Equity Ratio -

Business

Accounting

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 Current Year $ 27,970 80,264 100,917 9,097 251,134 $ 469,382 1 Year Ago $ 31,400 58,349 77,104 8,412 229,375 $ 404,640 $ 116,876 90,891 163,500 98,115 $ 469,382 Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: 2 Years Ago $ 33,717 45,401 48,361 $ 70,436 92,137 163,500 78,567 $ 404,640 3,635 206,086 $ 337,200 $ 45,846 73,776 163,500 54,078 $ 337,200

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 Current Year $ 27,970 80,264 100,917 9,097 251,134 $ 469,382 1 Year Ago $ 31,400 58,349 77,104 8,412 229,375 $ 404,640 $ 116,876 90,891 163,500 98,115 $ 469,382 Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity For both the current year and one year ago, compute the following ratios: 2 Years Ago $ 33,717 45,401 48,361 $ 70,436 92,137 163,500 78,567 $ 404,640 3,635 206,086 $ 337,200 $ 45,846 73,776 163,500 54,078 $ 337,200

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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Proper accounting form
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