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 $ 35,820 105,894 127,921 11,651 325,837 $ 607,123 $ 42, 289 72,541 94,889 10,771 302,892 $ 523,382 $ 42,756 55,879 61,934 4,845 262,186 $ 427,600 $ 154,197 111,856 162,500 178,570 $ 607,123 $ 90, 221 117,970 163,500 151,691 $ 523,382 $ 57,572 92,610 162,500 114,918 $ 427,600 Exercise 13-7 (Algo) Analyzing liquidity LO P3 (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? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Compute the current ratio for each of the three years. Numerator: Current assets Current Ratio Denominator: 7 Current liabilities 1 / Current Ratio Current ratio 0 to 1 Current Year: 1 Year Ago: 2 Years Ago: 0 to 1 0 to 1 = (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? Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Compute the acid-test ratio for each of the three years. Acid-test ratio Numerator: + Short-term investments Denominator: Current liabilities Cash + Current receivables = + + = Current Year: 1 Year Ago: 2 Years Ago: Acid-Test Ratio Acid-test ratio 0 to 1 0 to 1 0 to 1 + + / = + =