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 year.
b. Calculate Sleep Country’s working capital, current ratio, and acid-test ratio for each year.
c. What does each of the measures calculated in part (b) show? Comment on Sleep Country’s liquidity.

Taking It Further

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

Transcribed Image Text:

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 December 31, 2019 $ 44,040 20,899 65,361 6,008 71,486 709,258 68,156 24,415 33,309 485,662 305,510 December 31, 2018 $ 29,988 13,120 54,729 5,545 65,710 433,014 51,411 22,452 686 223,813 303,744 December 31, 2017 $ 23,620 14,002 38,275 1,833 52,773 351,945 52,406 19,587 662 142,985 266,808