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[The following information applies to the questions displayed below.] Simon Company's year-end balance sheets follow.
At December 31
Current Yr
1 Yr Ago
2 Yrs Ago
Assets
Cash
$
24,202
$
28,573
$
29,472
Accounts receivable, net
70,145
49,012
38,899
Merchandise inventory
88,194
66,729
42,699
Prepaid expenses
7,638
7,352
3,407
Plant assets, net
220,024
201,957
186,223
Total assets
$
410,203
$
353,623
$
300,700
Liabilities and Equity
Accounts payable
$
103,162
$
57,969
$
38,899
Long-term notes payable
75,576
82,960
66,455
Common stock, $10 par value
162,500
163,500
162,500
Retained earnings
68,965
49,194
32,846
Total liabilities and equity
$
410,203
$
353,623
$
300,700
(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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