AN Sleep Country is a Canadian specialty mattress retailer. The following information (all amounts in thousands) can be found on its recent balance sheets:

Instructions

a. Calculate Sleep Country?s current assets and current liabilities for each period.

b. Calculate Sleep Country?s working capital, current ratio, and acid-test ratio for each period.

c. What does each of the measures calculated in part (b) show? Comment on Sleep Country?s liquidity.

Why do you believe there is such a diff erence between the current and acid-test ratios? Is this normal?

Transcribed Image Text:

December 31, 2017 S 23,620 December 31, 2016 December 31, 2015 Cash Trade and other receivables Inventories Prepaid expenses and deposits Property and equipment Other long-term assets Trade and other payables Customer deposits Other current liabilities Non-current liabilities Shareholders' equity $ 16,639 8,406 $ 23,820 14,002 38,275 1,833 52,773 351,945 14,937 34,538 2,399 33,927 351,387 40,522 17,554 445 32,070 2,087 28,987 351,178 46,024 15,598 725 143,429 233,591 52,406 19,587 662 142,985 266,808 151,187