Simon Company’s year-end balance sheets follow.
| At December 31 | Current Yr | 1 Yr Ago | 2 Yrs Ago |
| Assets | | | | | | | | | | |
| Cash | | $ | 33,469 | | $ | 39,122 | | $ | 41,164 | |
| Accounts receivable, net | | | 97,984 | | | 71,230 | | | 54,337 | |
| Merchandise inventory | | | 119,500 | | | 92,298 | | | 60,815 | |
| Prepaid expenses | | | 11,214 | | | 10,270 | | | 4,437 | |
| Plant assets, net | | | 310,838 | | | 281,050 | | | 255,047 | |
| Total assets | | $ | 573,005 | | $ | 493,970 | | $ | 415,800 | |
| Liabilities and Equity | | | | | | | | | | |
| Accounts payable | | $ | 138,398 | | $ | 85,151 | | $ | 56,532 | |
Long-term notes payable secured by
mortgages on plant assets | | | 106,648 | | | 115,885 | | | 89,135 | |
| Common stock, $10 par value | | | 162,500 | | | 162,500 | | | 162,500 | |
| Retained earnings | | | 165,459 | | | 130,434 | | | 107,633 | |
| Total liabilities and equity | | $ | 573,005 | | $ | 493,970 | | $ | 415,800 | |
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(1-a) Compute the current ratio for each of thethree years.
(1-b) Did the current ratio improve or worsen overthe three year period?
(2-a) Compute the acid-test ratio for each of thethree years.
(2-b) Did the acid-test ratio improve or worsenover the three year period?
