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

At December $31$ Current Year $1$ Year Ago $2$ Years Ago

Assets

Cash $ $35,036$ $ $42,625$ $ $44,401$

Accounts receivable, net $102,58074,59456,880$

Merchandise inventory $131,58096,63760,564$

Prepaid expenses $11,74310,7504,982$

Plant assets, net $325,003297,758272,873$

Total assets $ $605,942$ $ $522,364$ $ $439,700$

Liabilities and Equity

Accounts payable $ $147,862$ $ $88,280$ $ $56,880$

Long$-$term notes payable $113,917122,54796,202$

Common stock, $$10$ par value $162,500162,500162,500$

Retained earnings $181,663149,037124,118$

Total liabilities and equity $ $605,942$ $ $522,364$ $ $439,700$

For both the current year and one year ago, compute the following ratios:

Exercise $13-7($Algo$)$ Analyzing liquidity LO P$3$

$(1-$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?

Exercise $13-7($Algo$)$ Analyzing liquidity LO P$3$

$(1-$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?