Exercise 13-7 Analyzing liquidity LO P3

Simon Companys year-end balance sheets follow.

Current Yr 1 Yr Ago 2 Yrs Ago 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 secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 29,167 83,698 106,286 9,300 261,010 $ 489,461 $ 34,431 $ 35,521 59,664 48,782 77,280 51,459 8,861 3,868 241,713 219,170 $ 421,949 $ 358,800 $ 119,438 $ 71,309 $ 48,309 92,939 162,500 114,584 $ 489, 461 94, 137 80,881 162,500 162,500 94,003 67,110 $ 421,949 $ 358,800 (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three year period? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Compute the current ratio for each of the three years. Current Ratio | Choose Denominator: Choose Numerator: Current Ratio / Current ratio Current Yr: = to 1 to 1 1 Yr Ago: 2 Yrs Ago: to 1