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

Skip to question

$[$The following information applies to the questions displayed below.$]$

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

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

Assets

Cash $ $33,946$ $ $40,076$ $ $40,093$

Accounts receivable, net $100,35270,13354,008$

Merchandise inventory $126,17490,84157,506$

Prepaid expenses $10,82210,6244,684$

Plant assets, net $304,054284,316261,209$

Total assets $ $575,348$ $ $495,990$ $ $417,500$

Liabilities and Equity

Accounts payable $ $144,694$ $ $81,308$ $ $56,763$

Long$-$term notes payable $109,247110,65590,422$

Common stock, $$10$ par value $163,500163,500162,500$

Retained earnings $157,907140,527107,815$

Total liabilities and equity $ $575,348$ $ $495,990$ $ $417,500$

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?