Exercise $13-8($Algo$)$ Analyzing and interpreting liquidity LO P$3[$Alternate Version$]$

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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 Year $1$ Year Ago $2$ Years Ago

Assets

Cash $ $23,671$ $ $27,669$ $ $29,116$

Accounts receivable, net $89,50062,90051,300$

Merchandise inventory $112,50085,00059,000$

Prepaid expenses $7,6237,2633,235$

Plant assets, net $176,091170,086157,449$

Total assets $ $409,385$ $ $352,918$ $ $300,100$

Liabilities and Equity

Accounts payable $ $99,898$ $ $58,450$ $ $38,821$

Long$-$term notes payable $75,42579,54864,996$

Common stock, $$10$ par value $162,500162,500162,500$

Retained earnings $71,56252,42033,783$

Total liabilities and equity $ $409,385$ $ $352,918$ $ $300,100$

The company$$s income statements for the current year and one year ago follow. Assume that all sales are on credit:

For Year Ended December $31$ Current Year $1$ Year Ago

Sales $ $532,201$ $ $419,972$

Cost of goods sold $ $324,643$ $ $272,982$

Other operating expenses $164,982106,253$

Interest expense $9,0479,659$

Income tax expense $6,9196,300$

Total costs and expenses $505,591395,194$

Net income $ $26,610$ $ $24,778$

Earnings per share $ $1\mathrm{.}64$ $ $1\mathrm{.}52$

Exercise $13-8($Algo$)$ Part $2[$Alternate Version$]$

$(2-$a$)$ Compute accounts receivable turnover.

$(2-$b$)$ For each ratio, determine if it improved or worsened in the current year.