The comparative financial statements of New World Piano Company for 20X3, 20X2, and 20X1 included the following selected data:

Balance Sheet:

20X3

Current Assets:

cash $67

Short-term investments $93

Receivables, net allowance $206

Inventories $408

Prepaid expenses $32

Total current assets $806

Total current Liabilities $440

Income Statement:

Net Sales $2,071

20X2

Current Assets:

cash $66

Short-term investments $101

Receivables, net allowance $154

Inventories $383

Prepaid expenses $31

Total current assets $735

Total current Liabilities $416

Income Statement:

Net Sales $2,005

20X1

Current Assets:

cash $62

Short-term investments $69

Receivables, net allowance $197

Inventories $341

Prepaid expenses $25

Total current assets $694

Total current Liabilities $388

Income Statement:

Net Sales $1,944

Required

1. Compute hese ratios for 20X3 and 20X2:

a. Current ratio

b. Acid-test Ratio

c. Days' sales in receivables

(Show Work)

2. Write an explaination to which ratio calues showed impovement from 20X2 to 20X3 and which ratio values deteriorated.