Sleep Country is a Canadian specialty mattress retailer. The following information (all amounts in thousands) can be

Question:

Sleep Country is a Canadian specialty mattress retailer. The following information (all amounts in thousands) can be found on its recent balance sheets:


Instructions
a. Calculate Sleep Country’s current assets and current liabilities for each year.
b. Calculate Sleep Country’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 Sleep Country’s liquidity.


Taking It Further

Why do you believe there is such a difference between the current and acid-test ratios? Is this normal?

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: 9781119786818

9th Canadian Edition

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

Question Posted: