The following information was extracted from Morgan Company's balance sheets Ratio Analysis

\begin{tabular}{|c|c|c|}

\hline & \multicolumn{2}{|c|}{ in 000 's } \\

\hline & December 31,2000 & December 31, 1999 \\

\hline Cash & $\$ 200$ & $\$ 300$ \\

\hline Securities held for resale . . . . . . . . . & 500 & 500 \\

\hline Accounts receivable. . . . . . . . . . . . . . & 1,400 & 1,700 \\

\hline Inventory . . . . . . . . . . . . . . . . . . . . . . . & 4,200 & 1,900 \\

\hline Total current assets . . . . . . . . . . . & $\$ 6,300$ & $\$ 4,400$ \\

\hline Total current liabilities & $\$ 6,100$ & $\$ 4,400$ \\

\hline

\end{tabular}

1. Compute Morgan Company's acid-test ratios for 2000 and 1999.
2. Compute Morgan Company's current ratios for 2000 and 1999.
3. Interpretive Question: How do you explain the change in opposite directions of the acid-test and current ratios from 1999 to 2000 ?