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Exercise 13-7 Analyzing liquidity LO P3 Simon Company's year end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs 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 secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 26,498 78,383 97,556 8,885 251,687 $ 463,089 $ 32,570 $ 32,607 56,439 43,906 73,842 47,232 8,214 3,587 228,081 198,768 $ 399,146 $ 326,100 $ 115, 289 $ 66,781 $ 43,045 85,305 162,500 99,915 $ 463,009 90,886 72,789 162,500 162,500 78,979 47,766 $ 399,146 $ 326,100 (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? Graded Practice o (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? (2-6) 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 LA Required 18 Required 2A Requited 28 Compute the add-test ratio for each of the three years. Acid.festatio Choose Numerator: Choose Denominator Current Yr: 1 Yr Ago: 2 Yrs Ago: - Acid Test Ratio Acid-test ratio Oto 1 Oto 1 0 to 1 + + +

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