Worthy Hills Corporation reported the following current accounts at December 31, 2010 (amounts in thousands):
Cash................................................ $1,800
Receivables...................................... 5,300
Inventory......................................... 2,300
Prepaid expenses............................. 1,100
Accounts payable............................ 2,800
Unearned revenue............................ 1,100
Accrued expenses payable............... 2,000
During 2011, Worthy Hills completed these selected transactions:
Sold services on account, $8,700
Depreciation expense, $700
Paid for expenses, $7,400
Collected from customers on account, $7,500
Accrued expenses, $300
Paid on account, $1,500
Used up prepaid expenses, $400
Compute Worthy Hills’s current ratio at December 31, 2010 and again at December 31, 2011. Did the current ratio improve or deteriorate during 2011? Comment on the level of the Company’s current ratio.