Maple Leaf Foods Inc. is a packaged meat producer. It reports biological assets on its balance sheet that consist of hogs and poultry livestock. These are considered current assets somewhat similar to inventory. The company reports the following current assets and current liabilities at December 31, 2017 (in thousands):

Cash ............................................................................. $203,425
Accounts payable and accruals .................................. 300,659
Accounts receivable ..................................................... 123,968
Biological assets ........................................................... 111,735
Current portion of long-term debt ................................... 805
Income taxes payable ..................................................... 7,855
Inventories ................................................................... 273,365
Notes receivable ............................................................ 28,918
Other current liabilities ................................................. 31,597
Prepaid expenses and other assets ............................ 24,393
Provisions ......................................................................... 9,335

Notes receivable are current assets that should be included in the acid-test ratio.

Instructions

a. Prepare the current liabilities section of the balance sheet. The provisions are due within 12 months of the balance sheet date.

b. Calculate the current and acid-test ratios.

c. At December 31, 2016, Maple Leaf Foods Inc. had total current assets of $972,228 thousand, which included cash of $403,621 thousand, receivables of $127,749 thousand, and notes receivable of $32,485. Current liabilities were $375,247 thousand. Did the current and acid-test ratios improve or weaken in 2017?

What other factors should be considered in assessing Maple Leaf Foods’ liquidity?