Exercise 13-7 Analyzing liquidity LO P3 Simon Company's year-end balance sheets follow. 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 Current Yr 1 Yr Ago 2 Yrs Ago $ 26,689 77,353 $ 30,585 $ 32,185 52,454 43,342 94,397 69,314 46,626 8,342 8,189 3,576 236,708 221,776 199,371 $ 443,489 $ 109,324 81,708 $382,318 $325, 100 $ 65,904 $ 43,342 89,692 73,284 162,500 162,500 162,500 89,957 64,222 45,974 $ 443,489 $382,318 $325,100 (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?