Check my work mode: This shows what is correct or incorrect for the work you hav

Question

Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion Return to question 8 Exercise 13-7 Liquidity analysis LO P3 0.78 points Simon Company's year-end balance sheets follow Assets Cash Account receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by $32,889 37,675 $ 40,446 52,326 123,444 88,012 59,162 4,538 298,048 278,365 248,028 557,433 480,546 404,500 92,461 10,591 890 137,413 79,588 $51,792 mortgages on plant assets Common stock, $10 par value Retained earnings Total 1iabilities and equity 106,893 110,526 92,076 162,500 162,500 162,500 150,627 127.932 98,132 $557,433 480,546 $ 404,500 1. Compute the current ratio for the year ended 2017, 2016, and 2015. 2. Compute the acid-test ratio for the year ended 2017, 2016, and 2015. Answer is complete but not entirely correct.

Explanation / Answer

1 Current Ratio Choose Numerator: / Choose Denominator: = Current Ratio Current assets / Current liabilities = Current Ratio 2017: 259385 / 137413 = 1.89 to 1 2016: 202181 / 79588 = 2.54 to 1 2015: 156472 / 51792 = 3.02 to 1 2 Acid-Test ratio Choose Numerator: / Choose Denominator: = Acid-Test Ratio Cash + Short-term investments + Current receivables / Current liabilities = Acid-Test Ratio 2017: 32889 + 0 + 92461 / 137413 = 0.91 to 1 2016: 37675 + 0 + 66604 / 79588 = 1.31 to 1 2015: 40446 + 0 + 52326 / 51792 = 1.79 to 1

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