Required information [The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow. At December 31 Assets Cash Current Year 1 Year Ago 2 Years Ago Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable $ 26,093 71,221 $ 30,501 $ 31,797 50,785 42,816 Long-term notes payable Common stock, $10 par value Retained earnings Total liabilities and equity 69,848 7,929 211,089 $ 370,152 $ 62,556 87,689 162,500 57,407 For both the current year and one year ago, compute the following ratios: 45,608 3,463 194,316 $ 318,000 $ 42,816 70,981 163,500 40,703 $ 318,000 94,162 7,995 229,905 $ 429,376 $ 105,845 80,723 163,500 79,308 $ 429,376 $ 370,152 (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? Compute the current ratio for each of the three years. Current Year: 1 Year Ago: 2 Years Ago: Numerator: Current Ratio Denominator: = Current Ratio = Current ratio = 0 to 1 0 to 1 0 to 1 Required 1A Required 1B > Compute the acid-test ratio for each of the three years. Current Year: 1 Year Ago: 2 Years Ago: Numerator: Acid-test ratio Denominator: = Acid-Test Ratio + Short-term investments + + + + + + + < Required 1B Required 2B > Acid-test ratio = 0 to 1 = 0 to 1 = 0 to 1