Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below] Simon Company's year-end balance sheets follow. Current Year 1 Year ago 2 Years 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 Common stock, $10 par value Retained earnings Total liabilities and equity $ 25,644 76,577 93, 449 8,258 235, 109 $ 439,037 $ 29, 370 51,398 71,419 8,187 218, 106 $ 378,480 $ 31,849 42,465 43,891 3,435 193,760 $ 315,400 $ 110,413 83,364 162,500 82,760 $ 439, 037 $ 63,963 88,791 162,500 63,226 $ 378,480 $ 40,800 69,006 163,500 42,094 $ 315,480 Exercise 13-7 (Algo) Analyzing liquidity LO P3 (1-a) Compute the current ratio for each of the three years. (1-1) 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 Denominator: Numerator: 7 7 Current assets / 11 Current Year: 1 Year Ago: 2 Years Ago: Current Ratio Current ratio 0 to 1 0 to 1 0 to 1 1 11 = Required 1A Required 1B > Required 1A Required 15 Required 2A Required 20 Compute the acid test ratio for each of the three years. Add testet Denominator Numer Short-term investments + Current Year 1 Year Agos 2 Years Agar Acid-Tus Ratio Acid-test ratio Olta 1 Oto 1 0 101