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 $ $30,706$ $ $35,537$ $ $35,581$

Accounts receivable, net $88,99661,56946,018$

Merchandise inventory $108,57283,82452,055$

Prepaid expenses $10,0849,3293,993$

Plant assets, net $276,935253,959221,753$

Total assets $ $515,293$ $ $444,218$ $ $359,400$

Liabilities and Equity

Accounts payable $ $127,025$ $ $75,073$ $ $47,441$

Long$-$term notes payable $96,875103,19277,045$

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

Retained earnings $127,893102,45371,414$

Total liabilities and equity $ $515,293$ $ $444,218$ $ $359,400$

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?