New Look Vision Group Inc. manufactures and retails eye care products. The company operates company stores under different banners including New Look Eyewear, Vogue Optical, Iris, and Greiche & Scaff. Selected information from New Look’s comparative balance sheet follows:

Instructions
a. Calculate (1) working capital and (2) the current ratio for each year. Comment on your results.
b. Should the inventory be included in an acid-test ratio calculation? Why or why not?

Transcribed Image Text:

NEW LOOK VISION GROUP INC. Consolidated Balance Sheet (partial) December 30 (in thousands of Canadian dollars) Dec. 28, 2019 Current assets Cash Receivables Income taxes receivable Loans and advances Inventory Prepaid expenses Other investments Total current assets Total current liabilities $ 5,982 10,684 581 6,292 34,826 3,196 8,866 $70,427 $59,817 Dec. 29, 2018 $10,559 9,469 1,895 7,353 30,079 3,717 $63,072 $69,027