Use the following information for the Exercises below. $($Algo$)$

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

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

Assets

Cash $ $29,880$ $ $34,578$ $ $35,291$

Accounts receivable, net $86,60262,95648,995$

Merchandise inventory $109,97478,34651,141$

Prepaid expenses $9,3348,9854,123$

Plant assets, net $270,654251,725227,950$

Total assets $ $506,444$ $ $436,590$ $ $367,500$

Liabilities and Equity

Accounts payable $ $128,627$ $ $75,259$ $ $47,540$

Long$-$term notes payable $95,211101,42080,405$

Common stock, $$10$ par value $163,500162,500162,500$

Retained earnings $119,10697,41177,055$

Total liabilities and equity $ $506,444$ $ $436,590$ $ $367,500$

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?