Exercise 17-7 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 $ 24,550 72,605 $ 29,868 $ 29,898 50,218 40,661 93,112 65,683 42,884 8,229 3,355 226,092 185,202 $ 424,588 $ 106,780 81,419 162,500 73,889 $ 424,588 7,840 212,415 $ 366,024 $ 302,000 $ 61,239 $ 40,263 85,027 162,500 57,258 66,742 162,500 32,495 $ 366,024 $ 302,000 (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?