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Simon Company s year - end balance sheets follow. At December 3 1 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 3

Simon Companys year-end balance sheets follow.
At December 31 Current Yr 1 Yr Ago 2 Yrs Ago
Assets
Cash $ 34,905 $ 42,037 $ 41,651
Accounts receivable, net 103,20973,56554,968
Merchandise inventory 125,91197,21162,789
Prepaid expenses 11,24110,9274,628
Plant assets, net 322,320291,420265,264
Total assets $ 597,586 $ 515,160 $ 429,300
Liabilities and Equity
Accounts payable $ 148,799 $ 87,062 $ 57,801
Long-term notes payable secured by
mortgages on plant assets 115,717122,04194,875
Common stock, $10 par value 162,500162,500162,500
Retained earnings 170,570143,557114,124
Total liabilities and equity $ 597,586 $ 515,160 $ 429,300
(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?

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