Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below. Simon Company's year-end balance sheets follow 2015 At December 31 Assets Cash Accounts receivable, net 72,731 2017 2016 $ 25,862 30,829 30,867 52,904 40,341 Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable 95,178 71,293 42,959 3,498 232,072 211,497 191,035 $434,007 $374,144 $308,700 8,164 7,621 $108,068 $ 64,495 $ 40,341 secured by mortgages on plant assetS Common stock, value Retained earnings Total liabilities and equity 82,409 88,635 67,540 162,500 162,500 162,500 ,319 $434,007 $374,144 $308,700 $10 par 81,030 58,514 38 The company's income statements for the years ended December 31, 2017 and 2016, follow For Year Ended December 31 Sales 2017 2016 $564,209 $445,231 cost of goods $344,167 sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income $289,400 112,643 10,240 6,678 174,905 9,592 7,335 535,999 $ 28,210 $ 1.74 418,961 $ 26,270 $ 1.62 Earnings per share Calculate the company's long-term risk and capital structure positions at the end of 2017 and 2016 by computing the following ratios (3) Times interest earned. imes Interest Earned Times Interest Earned Choose Numerator: Choose Denominator: Times interest earned 201 201 times times

Explanation / Answer

Times interest charged = EBIT / interest expense 2017 2016 EBIT = net income + income tax + interest expense Net income 28210 26270 Income taxes 7335 6678 Interest expense 9592 10240 EBIT 45137 43188 Times interest charged 4.7 4.2 times

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