**Debt and Equity Ratios****(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.*Tabs: - Required 1- Required 2A- Required 2B- Required 3A- Required 3B**Debt and Equity Ratio Calculations** Instruction: Compute debt and equity ratio for the current year and one year ago.**Debt Ratio Table:**- **Numerator / Denominator = Debt Ratio**- Current Year: - Numerator: [ ] - Denominator: [ ] - Result: [ ] - Debt Ratio: [ ] %- 1 Year Ago: - Numerator: [ ] - Denominator: [ ] - Result: [ ] - Debt Ratio: [ ] %**Equity Ratio Table:**- **Numerator / Denominator = Equity Ratio**- Current Year: - Numerator: [ ] - Denominator: [ ] - Result: [ ] - Equity Ratio: [ ] %- 1 Year Ago: - Numerator: [ ] - Denominator: [ ] - Result: [ ] - Equity Ratio: [ ] %Use the buttons to navigate to Required 2A for further calculations. **Required Information****Use the following information for the Exercises below. (Algo)**[The following information applies to the questions displayed below.]Simon Company's year-end balance sheets follow.---**At December 31**| | Current Year | 1 Year Ago | 2 Years Ago ||----------------------|--------------|------------|-------------|| **Assets** | | | || Cash | $25,693 | $30,032 | $31,284 || Accounts receivable, net | $75,195 | $51,526 | $40,485 || Merchandise inventory | $91,790 | $68,088 | $44,871 || Prepaid expenses | $7,868 | $7,729 | $3,408 || Plant assets, net | $226,383 | $210,667 | $189,752 || **Total assets** | $426,929 | $368,042 | $309,800 || | | | || **Liabilities and Equity** | | | || Accounts payable | $106,305 | $60,955 | $40,894 || Long-term notes payable | $81,065 | $86,343 | $66,412 || Common stock, $10 par value | $162,500 | $163,500 | $163,500 || Retained earnings | $77,059 | $57,244 | $38,994 || **Total liabilities and equity** | $426,929 | $368,042 | $309,800 |For both the current year and one year ago, compute the following ratios:---**Exercise 17-9 (Algo) Analyzing risk and capital structure LO P3**The company's income statements for the current year and one year ago, follow.---**For Year Ended December 31**| | Current Year | 1 Year Ago ||----------------------|--------------|------------|| **Sales** | $555,008 | $437,970 || Cost of goods sold | $338,555 | $284,681 || Other operating expenses | $172,052 | $110,806 |

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Description: **Debt and Equity Ratios****(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 y

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Business

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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 Current Year 1 Year Ago 2 Years Ago $ 25,693 75, 195 91,790 7,868 226,383 $426,929 $ 106,305 81.065 $ 30,032 51,526 68,088 7,729 210,667 $368,042 $ 60,955 86.343 $ 31,284 40,485 44,871 3,408 189,752 $ 309,800 $ 40,894 66.412

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 Current Year 1 Year Ago 2 Years Ago $ 25,693 75, 195 91,790 7,868 226,383 $426,929 $ 106,305 81.065 $ 30,032 51,526 68,088 7,729 210,667 $368,042 $ 60,955 86.343 $ 31,284 40,485 44,871 3,408 189,752 $ 309,800 $ 40,894 66.412

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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