Simon Companys year-end balance sheets follow.

At December 31	Current Yr				1 Yr Ago			2 Yrs Ago
Assets
Cash		$	32,000		$	38,160		$	40,951
Accounts receivable, net			91,808			68,103			53,011
Merchandise inventory			118,965			89,993			55,887
Prepaid expenses			10,201			10,116			4,462
Plant assets, net			294,873			265,910			247,289
Total assets		$	547,847		$	472,282		$	401,600
Liabilities and Equity
Accounts payable		$	139,142		$	79,816		$	52,481
Long-term notes payable secured by mortgages on plant assets			100,935			107,539			90,529
Common stock, $10 par value			162,500			162,500			162,500
Retained earnings			145,270			122,427			96,090
Total liabilities and equity		$	547,847		$	472,282		$	401,600

(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?

Compute the current ratio for each of the three years.

Current Ratio
	Choose Numerator:	/	Choose Denominator:	=	Current Ratio
		/		=	Current ratio
Current Yr:		/		=		to 1
1 Yr Ago:		/		=		to 1
2 Yrs Ago:		/		=		to 1

Did the current ratio improve or worsen over the three year period?

Current ratio

Compute the acid-test ratio for each of the three years.

Acid-test ratio
	Choose Numerator:					/	Choose Denominator:	=	Acid-Test Ratio
		+		+		/		=	Acid-test ratio
Current Yr:		+		+		/		=		to 1
1 Yr Ago:		+		+		/		=		to 1
2 Yrs Ago:		+		+		/		=		to 1

Did the acid-test ratio improve or worsen over the three year period?

Acid-test ratio