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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 Common stock, $10 par value Retained earnings Total liabilities and equity Income tax expense Total costs and expenses Net income Earnings per share Current Year 1 Year Ago 2 Years Ago $ 35,333 $ 35,005 $ 29,030 89,343 109,060 61,833 46,673 78,472 51,234 9,091 252,561 4,048 223,840 $ 437,290 $ 360,800 9,445 270,378 $ 507,256 $ 126,307 $ 75,380 102,588 96,318 162,500 122,131 162,500 96,822 $ 507,256 $ 437,290 The company's income statements for the current year and one year ago, follow. Current Year 1 Year Ago For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Current Year: 1 Year Ago: Numerator: $ 402,254 204,424 11,210 8,573 $659,433 626,461 $ 32,972 $ 2.03 Complete this question by entering your answers in the tabs below. Required 2A Required 28 Compute debt-to-equity ratio for the current year and one year ago. Debt-To-Equity Ratio $ 49,054 79,737 (2-0) 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? Denominator: 162,500 69,509 $360,800 "1 $ 338,244 131,655 11,969 7,806 $ 520,375 489,674 $ 30,701 $ 1.89 Debt-To-Equity Ratio Debt-to-equity ratio 0 to 1 0 to 1

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 Total liabilities and equity Income tax expense Total costs and expenses Net income Earnings per share Current Year 1 Year Ago 2 Years Ago $ 35,333 $ 35,005 $ 29,030 89,343 109,060 61,833 46,673 78,472 51,234 9,091 252,561 4,048 223,840 $ 437,290 $ 360,800 9,445 270,378 $ 507,256 $ 126,307 $ 75,380 102,588 96,318 162,500 122,131 162,500 96,822 $ 507,256 $ 437,290 The company's income statements for the current year and one year ago, follow. Current Year 1 Year Ago For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Current Year: 1 Year Ago: Numerator: $ 402,254 204,424 11,210 8,573 $659,433 626,461 $ 32,972 $ 2.03 Complete this question by entering your answers in the tabs below. Required 2A Required 28 Compute debt-to-equity ratio for the current year and one year ago. Debt-To-Equity Ratio $ 49,054 79,737 (2-0) 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? Denominator: 162,500 69,509 $360,800 "1 $ 338,244 131,655 11,969 7,806 $ 520,375 489,674 $ 30,701 $ 1.89 Debt-To-Equity Ratio Debt-to-equity ratio 0 to 1 0 to 1

Managerial Accounting
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 13E: Ratio of liabilities to stockholders equity and times interest earned The following data were taken...
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(1) Compute debt and equity ratio for the current year and one year ago. Current Year: 1 Year Ago: Current Year: 1 Year Ago: Numerator: Prepaid expenses Plant assets, net Total assets Numerator: Accounts receivable, net Merchandise inventory Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity Simon Company's year-end balance sheets follow. At December 31 Assets Cash Income tax expense Total costs and expenses Net income Earnings per share Debt Ratio Required 2A Required 28 Current Year: 1 Year Ago: 1 Equity Ratio 1 Numerator: 1 1 Denominator: Denominator: $ 29,030 89,343 109,060 9,445 270,378 $ 507,256 $ 126,307 96,318 162,500 122,131 $ 507,256 $ 402,254 284,424 11,210 8,573 Complete this question by entering your answers in the tabs below. Debt-To-Equity Ratio Compute debt-to-equity ratio for the current year and one year ago. $ 75,380 102,588 162,500 96,822 $ 437,298 $ 659,433 626,461 $ 32,972 $ 2.03 Current Year 1 Year Ago 2 Years Ago $ 35,333 $ 35,005 61,833 46,673 78,472 51,234 4,848 9,891 252,561 223,848 $360,800 $ 437,290 The company's income statements for the current year and one year ago, follow. Current Year 1 Year Ago For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Denominator: = = = = = = = = B Debt Ratio Debt ratio (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? % Equity Ratio Equity ratio 96 $ 49,054 79,737 162,500 69,509 $360,800 $ 338,244 131,655 11,969 7,806 $ 520,375 489,674 $ 30,701 $ 1.89 = Debt-To-Equity Ratio = Debt-to-equity ratio 0 to 1 0 to 1
Transcribed Image Text:(1) Compute debt and equity ratio for the current year and one year ago. Current Year: 1 Year Ago: Current Year: 1 Year Ago: Numerator: Prepaid expenses Plant assets, net Total assets Numerator: Accounts receivable, net Merchandise inventory Liabilities and Equity Accounts payable Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity Simon Company's year-end balance sheets follow. At December 31 Assets Cash Income tax expense Total costs and expenses Net income Earnings per share Debt Ratio Required 2A Required 28 Current Year: 1 Year Ago: 1 Equity Ratio 1 Numerator: 1 1 Denominator: Denominator: $ 29,030 89,343 109,060 9,445 270,378 $ 507,256 $ 126,307 96,318 162,500 122,131 $ 507,256 $ 402,254 284,424 11,210 8,573 Complete this question by entering your answers in the tabs below. Debt-To-Equity Ratio Compute debt-to-equity ratio for the current year and one year ago. $ 75,380 102,588 162,500 96,822 $ 437,298 $ 659,433 626,461 $ 32,972 $ 2.03 Current Year 1 Year Ago 2 Years Ago $ 35,333 $ 35,005 61,833 46,673 78,472 51,234 4,848 9,891 252,561 223,848 $360,800 $ 437,290 The company's income statements for the current year and one year ago, follow. Current Year 1 Year Ago For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Denominator: = = = = = = = = B Debt Ratio Debt ratio (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? % Equity Ratio Equity ratio 96 $ 49,054 79,737 162,500 69,509 $360,800 $ 338,244 131,655 11,969 7,806 $ 520,375 489,674 $ 30,701 $ 1.89 = Debt-To-Equity Ratio = Debt-to-equity ratio 0 to 1 0 to 1
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