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 $ 35, 326 96,420 123,729 11,376 314,448 $ 581,299 $ 40,090 $ 40,516 68,052 54,572 89,926 60,485 10,418 4,502 292,634 257,525 $ 501,120 $ 417,600 $ 147,638 $ 86,383 $ 55,123 107,099 162,500 164,062 $ 581,299 116,410 91,367 162,500 162,500 135,827 108,610 $ 501,120 $ 417,600 (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 Numerator: | Choose Denominator: II Current Ratio / II Current ratio Current Yr: / to 1 = = / to 1 1 Yr Ago: 2 Yrs Ago: / II to 1 Required 1A Required 1B > 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: Il Acid-Test Ratio + + / = Acid-test ratio Current Yr: + + 1 II 0 to 1 0 to 1 + + / = 1 Yr Ago: 2 Yrs Ago: + + / II 0 to 1