Simon Company's year-end balance sheets follow. At December 31 Assets Current Year 1 Year Ago 2 Years Ago 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 $ 24,382 72,828 $ 29,081 51,910 $ 31,536 91,568 8,172 224,730 67,923 7,405 207,198 $ 421,680 $ 363,517 $ 106,048 80,861 162,500 72,271 $ 60,206 81,937 163,500 57,874 $ 421,680 $ 363,517 For both the current year and one year ago, compute the following ratios: 39,987 44,790 3,435 192,552 $ 312,300 $ 40,399 70,399 163,500 38,002 $ 312,300 Exercise 17-7 (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. Current Ratio Numerator: Denominator: = Current Ratio Current assets Current liabilities = Current ratio Current Year: = 0 to 1 1 Year Ago: 2 Years Ago: = 0 to 1 0 to 1 < Required 1A Required 1B > Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Did the current ratio improve or worsen over the three-year period? Current ratio < Required 1A Required 2A > Required 1A Required 1B Required 2A Required 2B Compute the acid-test ratio for each of the three years. Current Year: 1 Year Ago: 2 Years Ago: Numerator: + Short-term investments + + + + Acid-test ratio + + + 1 / 1 Denor < Required 1B Required 2B Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2A Required 2B Did the acid-test ratio improve or worsen over the three-year period? Acid-test ratio < Required 2A Required 2B >