Simon Company's year-end balance sheets follow. 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 $ 37,292 48,260 Current Year 1 Year Ago 2 Years Ago $ 34,396 60,194 81,148 9,211 249,348 $434,297 $ 30,318 83,563 108,314 9,763 271,827 $ 503,785 $127,951 95,659 $ 73,396 101,886 162,500 96,515 163,500 116,675 $ 503,785 $ 434,297 For both the current year and one year ago, compute the following ratios: 51,392 4,184 228,172 $ 369,300 $ 48,260 81,615 162,500 76,925 $ 369,300 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. Current Year: 1 Year Ago: 2 Years Ago: Numerator: Current Ratio Denominator: Current Ratio Current ratio to 1 = to 1 to 1 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 Did the current ratio improve or worsen over the three-year period? Current ratio < Required 1A Required 2A > Improved Worsened Required IA Required 18 Required 2A Required 281 Compute the acid-test ratio for each of the three years. Current Year: 1 Year Ago: 1 2 Years Ago: + Numerator: Short-term investments + Acid-test ratio Denominator: Acid-Test Ratio Acid-test ratio + to 1 + to 1 to 1 Did the acid-test ratio improve or worsen over the three-year period? Acid-test ratio < Required 2A Required 20