Avigilon Corporation sells security solutions. Its security cameras and surveillance software are sold to a variety of users and locations around the world, including airports, casinos, factories, and prisons. The company is headquartered in Vancouver and its security solutions are assembled and tested in its Richmond, B.C., facility. Selected information from Avigilon's comparative balance sheet follows.

Instructions
(a) In the financial statement notes, the company explains that cash consists of cash on hand and cash equivalents. What is a cash equivalent?
(b) Calculate (1) working capital and (2) the current ratio for each year. Comment on your results.
(c) Should the inventory be included in an acid-test ratio calculation? Why or why not?

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AVIGILON CORPORATION Consolidated Balance Sheet (partial) December 31 in Canadian dollars Dec. 31, 2014 Dec. 31, 2013 Current assets Cash Trade and other receivables Inventories Prepaid expenses 73,141 48,977 37,691 5,122 164,931 104,875 19,444 1,467 157,102 Total current assets Non-current assets Property, plant and equipment Intangible assets Goodwill Deposits Deferred tax assets 2,987 129,669 17,040 747 9,253 $334,627 8,568 14,791 6,558 586 1,334 $188,939 Total assets 32,677 At 20,818 Total current liabilities