[The following information applies to the questions displayed below.,] Simon Com

Question

[The following information applies to the questions displayed below.,] Simon Company's year-end balance sheets follow 2013 2012 At December 31 Assets Cash Accounts recelvable, net Merchandise Inventory Prepald expenses Plant assets, net 2014 $ 27,890 32,920 $ 31,990 41,792 47,739 3,554 249,324 230,136 201,325 76,870 100,635 8,717 54,813 73,171 8,474 Total assets $463,436 399,514 $326.400 Liabilities and Equity Accounts payable Long-term notes payable secured by $ 118,857 $ 66,168 $ 42,223 72,134 162,500 2,500 162,500 94,953 78,958 49,543 87126 91,888 mortgages on plant assets Common stock, $10 par value Retalned earnings Total liablities and equity $463,436 399,514 $326.400

Explanation / Answer

(1) Debt and Equity Ratios Debt Ratio Numerator Denominator Debt Ratio 2014 205983 / 463436 = 44% 2013 158056 / 399514 = 40% Equity Ratio Numerator Denominator Debt Ratio 2014 257453 / 463436 = 56% 2013 241458 / 399514 = 60% (2) Debt-To-Equity Ratio Numerator Denominator Debt Ratio 2014 205983 / 257453 = 80% 2013 158056 / 241458 = 65% (3) For times interest earned, the EBIT and interest costs need to be provided, which are not given in the problem. Hence, the same cannot be worked out.

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