Presented below is the condensed financial statements of ABC Ltd. for the year ended March 31, 2010.

a) Provide a definition for the term current liability. (Refer to the relevant standard or authoritative literature) (2 marks)

b) Provide definitions for each type of current liability presented in the financial statements. (Refer to the relevant standard or authoritative literature) (8 marks)

c) Evaluate the companys liquidity and financial flexibility by calculating and analysing the following ratios current ratio and acid test ratio for the two year period. (10 marks)

ABC Ltd Staternent of Financial Position 31 March 2010 (expressed in Jamaican dollars unless otherwise indicated 2010 $'000 2009 $'000 Note Non-Current Assets Fixed assets Investments 13 5,779,819 90,607 5,001,996 62,353 Current Assets 15 16 46,699 118,730 21,243 186,672 33,417 115,752 45,345 194,514 Trade and other receivables Cash and short term investments Current Liabilities Trade and other payables Bank overdraft Taxation payable Current portion of long term liabilities 142,023 8,747 31,087 60,427 242,284 (55,612) 5,814,814 106,700 58 20,717 42,857 170,332 24,182 5,088,531 18 Net Current (Liabilities)/Assets Stockholders' Equity Share capital Capital reserve Fair value reserve Retained earnings 20 120,166 120,166 3,705,280 1.984 31,987 3,859.417 21 4,176,351 (750) 7,088 4,302,855 Non-Current Liabilities Long term liabilities Deferred tax liabilities 18 87,871 22 1424,088 5,814,814 49.282 1,179.832 5,088,531