Caribou Coffee€™s Cash Flow Statement Following is the current asset and current liability portion of the balance sheet for Caribou Coffee as of December 30, 2007, and December 31, 2006:

Required
1. Determine the company€™s current ratio for each fiscal year. What do the ratios indicate about the liquidity of the company? What were the major causes for any changes in liquidity?
2. Explain why deferred revenue is considered a current liability on the company€™s balancesheet.

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December 30. 2007 December 31 Current assets: Cash and cash equivalents Accounts recelvable (net of allowance for doubtful $9,886,427 14,752,269 accounts of $7989 and $12,693 at December 30, 2007 and December 31, 2006, respectively) Other receivables Income tax receivable Inventories Prepaid expenses and other current assets Total current assets Current liabilities: Accounts payable Accrued compensation Accrued expenses Deferred revenue Total current liabilities 3,116,864 1,544,281 149,304 1,663,139 1,769,256 10,228,527 10,294.493 339,596 $26,616,071 $29.818,753 1,690,668 $9,650,326 $9,681.879 5,676,449 7518,379 9,002,588 $36,819 937 31.879 295 7863.445 9,318,442 9,987724