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Simon Companys year-end balance sheets follow.
| At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago |
| Assets | | | | | | | | | | | |
| Cash | | $ | 28,446 | | | $ | 32,579 | | $ | 36,403 | |
| Accounts receivable, net | | | 84,111 | | | | 58,189 | | | 47,124 | |
| Merchandise inventory | | | 103,659 | | | | 76,892 | | | 51,708 | |
| Prepaid expenses | | | 9,253 | | | | 8,640 | | | 3,927 | |
| Plant assets, net | | | 261,536 | | | | 243,532 | | | 217,838 | |
| Total assets | | $ | 487,005 | | | $ | 419,832 | | $ | 357,000 | |
| Liabilities and Equity | | | | | | | | | | | |
| Accounts payable | | $ | 123,690 | | | $ | 70,952 | | $ | 47,124 | |
| Long-term notes payable secured by mortgages on plant assets | | | 92,473 | | | | 97,527 | | | 80,475 | |
| Common stock, $10 par value | | | 162,500 | | | | 162,500 | | | 162,500 | |
| Retained earnings | | | 108,342 | | | | 88,853 | | | 66,901 | |
| Total liabilities and equity | | $ | 487,005 | | | $ | 419,832 | | $ | 357,000 | |
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The companys income statements for the Current Year and 1 Year Ago, follow.
| For Year Ended December 31 | Current Yr | 1 Yr Ago |
| Sales | | | | $ | 633,107 | | | | | $ | 499,600 | |
| Cost of goods sold | $ | 386,195 | | | | | $ | 324,740 | | | | |
| Other operating expenses | | 196,263 | | | | | | 126,399 | | | | |
| Interest expense | | 10,763 | | | | | | 11,491 | | | | |
| Income tax expense | | 8,230 | | | | | | 7,494 | | | | |
| Total costs and expenses | | | | | 601,451 | | | | | | 470,124 | |
| Net income | | | | $ | 31,656 | | | | | $ | 29,476 | |
| Earnings per share | | | | $ | 1.95 | | | | | $ | 1.81 | |
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For both the Current Year and 1 Year Ago, compute the following ratios:
(1) Debt and equity ratios.
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| | | Debt Ratio | | | Choose Numerator: | / | Choose Denominator: | = | Debt Ratio | | | | / | | = | Debt ratio | | Current Year: | | / | | = | | % | | 1 Year Ago: | | / | | = | | % | | Equity Ratio | | | Choose Numerator: | / | Choose Denominator: | = | Equity Ratio | | | | / | | = | Equity ratio | | Current Year: | | / | | = | | % | | 1 Year Ago: | | / | | = | | % | |
Return on total assets
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| | | Return On Total Assets | | | Choose Numerator: | / | Choose Denominator: | = | Return On Total Assets | | | | / | | = | Return on total assets | | Current Year: | | / | | = | 0 | % | | 1 Year Ago: | | / | | = | 0 | % | |
Answer & Explanation
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