Exercise 13-7 Analyzing liquidity LO P3 Simon Company's 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 $ 29,604 86,667 105,699 9,437 275,420 $ 506,827 $ 35,653 61,780 79,214 9,267 251,006 $ 436,920 $ 37,127 48,061 51,702 3,925 223,285 $ 364,100 $ 123,676 $ 76,055 $ 49,503 97,189 162,500 123,462 $ 506,827 99,487 82,075 162,500 162,500 98,878 70,022 $ 436,920 $ 364,100 (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? Required 1A Required 1B Required 2A Required 2B Compute the current ratio for each of the three years. Current Ratio 1 Choose Denominator: Choose Numerator: Current Ratio Current ratio to 1 Current Yr: 1 Yr Ago: 2 Yrs Ago: to 1 to 1 Required 1A Required 1B Required 2A Required 2B Compute the acid-test ratio for each of the three years. Acid-test ratio Choose Numerator: Choose Denominator: = Acid-Test Ratio Acid-test ratio + Current Yr: 1 Yr Ago: 2 Yrs Ago: +