[The following information applies to the questions displayed below.]
Simon Company’s year-end balance sheets follow.
|At December 31||2017||2016||2015|
|Accounts receivable, net||89,500||62,500||50,200|
|Plant assets, net||278,500||255,000||230,500|
|Liabilities and Equity|
|Long-term notes payable secured by
mortgages on plant assets
|Common stock, $10 par value||163,500||163,500||163,500|
|Total liabilities and equity||$||523,000||$||445,000||$||377,500|
The company’s income statements for the years ended December 31, 2017 and 2016, follow.
|For Year Ended December 31||2017||2016|
|Cost of goods sold||$||411,225||$||345,500|
|Other operating expenses||209,550||134,980|
|Total costs and expenses||642,400||502,625|
|Earnings per share||$||1.90||$||1.80|
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.
Compute the times-interest earned ratio for 2016:
Compute the times-interest earned ra...
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