Solution-Compute the current ratio for each of the three

Compute the current ratio for each of the three years

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Reference no: EM132474396

Problem - Simon Company's year-end balance sheets follow.

At December 31	Current Yr	1 Yr Ago	2 Yrs Ago
Assets
Cash	$37,043	$42,459	$44,219
Accounts receivable, net	104,234	71,360	57,803
Merchandise inventory	113,676	96,242	60,316
Prepaid expenses	11,466	11,145	4,672
Plant assets, net	323,138	304,274	270,890
Total assets	$609,557	$525,480	$437,900
Liabilities and Equity
Accounts payable	$154,815	$86,142	$59,537
Long-term notes payable secured by mortgages on plant assets	116,889	120,860	96,776
Common stock, $10 par value	162,500	162,500	162,500
Retained earnings	175,353	155,978	119,087
Total liabilities and equity	$609,557	$525,480	$437,900

Required -

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?

Reference no: EM132474396

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Compute the current ratio for each of the three years

Reference no: EM132474396

Reference no: EM132474396

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