# Question

Clearwater Seafoods Inc. is a leader in the global seafood market. Its main operations include harvesting, processing, distribution, and marketing of seafood products primarily in Canada, the United States, Europe, and Asia. Selected financial statement information for the company over the four- year period 2009– 2012 is presented below (amounts in thousands of Canadian dollars):

Required:

1. Compute the quick ratio for each of the four years, and comment on the four- year trend of the ratio.

2. Compute the trade payables turnover ratio and the average age of payables for the years 2010– 2012. Did the company’s management of its trade payables improve over time? Explain.

3. In computing the trade payables turnover ratio, it is preferable to use purchases instead of cost of sales in the numerator. Re-compute the ratio for each of the years 2010– 2012 using purchases in the numerator. Do the new ratios differ significantly from those computed in (2)? Explain.

Required:

1. Compute the quick ratio for each of the four years, and comment on the four- year trend of the ratio.

2. Compute the trade payables turnover ratio and the average age of payables for the years 2010– 2012. Did the company’s management of its trade payables improve over time? Explain.

3. In computing the trade payables turnover ratio, it is preferable to use purchases instead of cost of sales in the numerator. Re-compute the ratio for each of the years 2010– 2012 using purchases in the numerator. Do the new ratios differ significantly from those computed in (2)? Explain.

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