Refer to the financial statements of Canadian Tire Corporation (Appendix A) and RONA Inc. (Connect ), and the Industry Ratio Report (Appendix B on Connect).
1. Compute the quick ratio for each company for each year shown in the financial statements.
2. Compare the most recent quick ratio for each company to the industry average from the Industry Ratio Report. Based solely on the quick ratio, are these companies more or less liquid than the average company in their industry?
3. Compute the trade payables turnover ratio for each company for each year.
4. Using this information and any other data from the annual report, write a brief assessment of the liquidity of the two companies.