Maple Leaf Foods Inc. reports the following current assets and current liabilities at December 31, 2011 (in thousands):
Accounts payable and accruals ...................................... $482,059
Accounts receivable ................................................... 133,504
Bank indebtedness .................................................... 36,404
Biological assets ....................................................... 49,265
Current portion of long-term debt .................................. 5,618
Income and other taxes recoverable ................................ 43,789
Inventories ............................................................. 293,231
Notes receivable ...................................................... 98,545
Other current liabilities .............................................. 20,409
Prepaid expenses and other assets ................................. 24,688
Provisions .............................................................. 44,255
Instructions
(a) Prepare the current liabilities section of the balance sheet.
(b) Calculate the current and acid-test ratios.
(c) At December 31, 2010, Maple Leaf Foods Inc. had current assets of $583,557 thousand, cash, short-term investments plus receivables of $217,751 thousand, and current liabilities of $1,091,960 thousand. Did the current and acid-test ratios improve or weaken in 2011?
TAKING IT FURTHER
What other factors should be considered in assessing Maple Leaf Foods' liquidity?