Simon Company's year-end balance sheets follow.At December 31AssetsCurrent Year 1 Year Ago 2 Years AgoCashAccounts receivable, netMerchandise inventoryPrepaid expensesPlant assets, netTotal assetsLiabilities and EquityAccounts payable$ 26,78176,835$ 30,98854,229$ 32,94145,25347,72696,6058,886249,38875,3168,051226,670$ 395,254$ 458,495$ 111,882Long-term notes payableCommon stock, $10 par valueRetained earnings86,197162,50097,916$ 66,79892,727162,50073,229Total liabilities and equity$ 458,495$ 395,254For both the current year and one year ago, compute the following ratios:3,660206,520$ 336,100$ 43,47875,021162,50055,101$ 336,100esExercise 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?

Current Ratio is the ratio between current assets and current liabilities. It is calculated by…

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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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