Question: Use the following information for the Exercises below. (Algo) Skip to question [The following information applies to the questions displayed below.] Simon Company's year-end balance
Use the following information for the Exercises below. (Algo)
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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 | $ 24,990 | $ 28,924 | $ 29,533 |
| Accounts receivable, net | 70,298 | 51,620 | 40,181 |
| Merchandise inventory | 87,493 | 67,550 | 43,657 |
| Prepaid expenses | 8,048 | 7,292 | 3,248 |
| Plant assets, net | 224,421 | 202,588 | 187,781 |
| Total assets | $ 415,250 | $ 357,974 | $ 304,400 |
| Liabilities and Equity | |||
| Accounts payable | $ 103,397 | $ 61,708 | $ 40,181 |
| Long-term notes payable | 75,725 | 84,804 | 68,618 |
| Common stock, $10 par value | 162,500 | 163,500 | 162,500 |
| Retained earnings | 73,628 | 47,962 | 33,101 |
| Total liabilities and equity | $ 415,250 | $ 357,974 | $ 304,400 |
For both the current year and one year ago, compute the following ratios:
Exercise 13-7 (Algo) Analyzing liquidity LO P3
(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.
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Compute the acid-test ratio for each of the three years.
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