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Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Current Year 1 Year Ago 2 Years Ago $ 26,781 76,835 $ 30,988 54,229 96,605 8,886 249,388 $ 458,495 75,316 8,051 226,670 $ 395,254 $ 111,882 Long-term notes payable. Common stock, $10 par value 86,197 162,500 97,916 Total liabilities and equity $ 458,495 $ 395,254 Retained earnings $ 66,798 92,727 162,500 73,229 For both the current year and one year ago, compute the following ratios: $ 32,941 45,253 47,726 3,660 206,520 $ 336,100 $ 43,478 75,021 162,500 55,101 $ 336,100 es Exercise 17-7 (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?

Simon Company's year-end balance sheets follow. At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Current Year 1 Year Ago 2 Years Ago $ 26,781 76,835 $ 30,988 54,229 96,605 8,886 249,388 $ 458,495 75,316 8,051 226,670 $ 395,254 $ 111,882 Long-term notes payable. Common stock, $10 par value 86,197 162,500 97,916 Total liabilities and equity $ 458,495 $ 395,254 Retained earnings $ 66,798 92,727 162,500 73,229 For both the current year and one year ago, compute the following ratios: $ 32,941 45,253 47,726 3,660 206,520 $ 336,100 $ 43,478 75,021 162,500 55,101 $ 336,100 es Exercise 17-7 (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?

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 50E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...
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Simon Company's year-end balance sheets follow. At December 31 Assets Current Year 1 Year Ago 2 Years Ago Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable $ 26,781 76,835 $ 30,988 54,229 $ 32,941 45,253 47,726 96,605 8,886 249,388 75,316 8,051 226,670 $ 395,254 $ 458,495 $ 111,882 Long-term notes payable Common stock, $10 par value Retained earnings 86,197 162,500 97,916 $ 66,798 92,727 162,500 73,229 Total liabilities and equity $ 458,495 $ 395,254 For both the current year and one year ago, compute the following ratios: 3,660 206,520 $ 336,100 $ 43,478 75,021 162,500 55,101 $ 336,100 es Exercise 17-7 (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?
Transcribed Image Text:Simon Company's year-end balance sheets follow. At December 31 Assets Current Year 1 Year Ago 2 Years Ago Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable $ 26,781 76,835 $ 30,988 54,229 $ 32,941 45,253 47,726 96,605 8,886 249,388 75,316 8,051 226,670 $ 395,254 $ 458,495 $ 111,882 Long-term notes payable Common stock, $10 par value Retained earnings 86,197 162,500 97,916 $ 66,798 92,727 162,500 73,229 Total liabilities and equity $ 458,495 $ 395,254 For both the current year and one year ago, compute the following ratios: 3,660 206,520 $ 336,100 $ 43,478 75,021 162,500 55,101 $ 336,100 es Exercise 17-7 (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?
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