BCE Inc., more commonly known as Bell Canada, reports the following current assets and current liabilities at December 31, 2011 (in millions of dollars):
Cash .......................................................$ 130
Cash equivalents ......................................... 45
Current tax liabilities .................................... 47
Debt due within one year ............................. 2,106
Dividends payable ...................................... 415
Interest payable .......................................... 134
Inventory ................................................. 427
Other current assets .................................... 152
Prepaid expenses ....................................... 262
Trade and other receivables .......................... 3,162
Trade payables and other liabilities ................. 4,056
Instructions
(a) Prepare the current liabilities section of the balance sheet.
(b) Calculate the current and the acid-test ratio.
(c) On December 31, 2010, BCE Inc. had current assets of $4,655 million, cash and cash equivalents plus trade and other receivables of $3,795 million, and current liabilities of $6,954 million. Did the current and acid-test ratios improve or weaken in 2011?
TAKING IT FURTHER
What other factors should be considered in assessing BCE Inc.'s liquidity?