AN Big Rock Brewery Inc. brews and sells premium natural unpasteurized beer. The following information (all amounts

Question:

AN Big Rock Brewery Inc. brews and sells premium natural unpasteurized beer. The following information (all amounts in thousands) can be found on its recent balance sheets (or statements of financial position, as Big Rock calls them):

image

Instructions

a. Calculate Big Rock?s current assets and current liabilities for each year.

b. Calculate Big Rock?s working capital, current ratio, and acid-test ratio for each year.

c. What does each of the measures calculated in part (b) show? Comment on Big Rock?s liquidity.

At any point in time, a company will always have a larger current ratio than its acid-test ratio. Why? Would you expect this difference to be larger in a company like Big Rock Brewery than in a company like WestJet Airlines? Why or why not?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Accounting Principles Volume 1

ISBN: 978-1119502425

8th Canadian Edition

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

Question Posted: