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 $ $34,403$ $ $41,421$ $ $41,069$

Accounts receivable, net $101,70670,37552,611$

Merchandise inventory $126,62292,99658,329$

Prepaid expenses $10,85810,5564,429$

Plant assets, net $309,521287,333250,262$

Total assets $ $583,110$ $ $502,681$ $ $406,700$

Liabilities and Equity

Accounts payable $ $142,291$ $ $87,502$ $ $52,611$

Long$-$term notes payable $111,817112,14890,780$

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

Retained earnings $166,502140,531100,809$

Total liabilities and equity $ $583,110$ $ $502,681$ $ $406,700$

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

Exercise $17-7($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?