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 $ 30,661 88,002 111,730 9,496 264,657 $ 504,540 $ 33,752 $ 34, 141 62,111 45,986 79,661 49,970 9,225 3,793 250,199 218,010 $ 434,948 $ 351,900 5 $ 124,374 $ 73,506 $ 45,986 94,854 162,500 122,812 $ 504,540 98,037 78,548 162,500 162,500 100,905 64,866 $ 434,948 $ 351, 900 (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 | Choose Denominator: + Choose Numerator: Current Ratio = Current ratio 11 to 1 Current Yr: 1 Yr Ago: 2 Yrs Ago: = to 1 = to 1 Required 1A Required 1B > Required 1A Required 18 Required 2A Required 2B Compute the acid-test ratio for each of the three years 143803 INDA hooa habla Current Ye: 1 Yr Ago: 2 Yrs Ago: Acid. Test Ratio Acid-test ratio oto 1 0 to 1 oto 1 THE Required 18 Required 28