1. Current ratio: Calculate the current ratio for each of the three years. Indicate if the ratio has improved or worsened over the three-year period. 2. Acid-test ratio: Calculate the acid-test ratio for each of the three years. Indicate if the ratio has improved or worsened over the three-year period. 3. Reflection: Review the ratio results and express what they collectively suggest about the company's ability to pay its short-term cash requirements. At December 31 Assets Cash Accounts receivable, net Supplies Prepaid insurance Buildings, net Total assets Liabilities and Equity Accounts payable Long-term notes payable Common stock Retained earnings Total liabilities and equity Balance Sheets Current Year $29,107 85,214 110,355 9,374 264,278 $ 498,328 $ 122,843 91,812 163,500 120,173 $ 498,328 1 Year Ago $ 35,055 61,346 78,680 8,931 245,581 $ 429,593 $71,149 100,783 162,500 95,161 $ 429,593 2 Years Ago $36,165 47,255 51,873 3,898 226,109 365,300 $46,773 79,924 162,500 76,103 $365,300