Financial Accounting Using IFRS Worksheet

Question Description

Read the requirement carefully and using the concepts from Financial Accounting Using IFRS. Cambridge Business Publishers (CBP)

FINANCIAL STATEMENT ANALYSIS SITUATION In this project, assume the role of an analyst in a fund that invests in Canadian equities across all sectors. The fund, whose head office is on Bay Street, is looking to add a position in one of the following sectors: Consumer Cyclical, Consumer Staples, Industrials or Information Technology. Your fund has a mandate to be fully invested in equities at all times, so your job is to make the best selection possible. You do not have the option to recommend investing in another asset class or holding cash. FINANCIAL ANALYSIS Using Appendix I, select one of the above sectors and choose two companies operating in it. Your company must have been a listed company for at least 5 years. Email me the companies your group has selected . Two groups cannot select the same two companies. I will consider the first email received for any two companies to remove that pair from the selection pool. 1 I will advise you if your selection duplicates one already received, and ask you to make a different selection. INFORMATION REQUIRED FOR ANALYSIS Download the following information about your companies from Mergent Online, the SMU library database, to Excel.

The Content section of our BrightSpace site has short videos on how to download Mergent Online data and how to format it for analysis. o o Five years’ Annual Balance Sheets; Five years’ Annual Income Statements; REQUIRED ANALYSIS For the two companies you have selected prepare: • Common Size Balance Sheets and Income Statements for your five years’ of data: o Balance sheets (express balance sheet figures as a percent of total assets); and o Income statements (express income statement figures as a percent of sales). • Vertical analysis of your Balance Sheet and Income Statement data. Set the earliest year to 100% and express all applicable financial statement figures as a percent of that year. Another group could still select one of the companies in the pair and another different one from the applicable Sector. 1 • Calculate any of the following ratios that are applicable (e.g., if your company does not have inventory, the inventory turnover ratio would be “n/a”) for both of your companies for the most recent four 2 years: o Return on Equity o Return on Assets o Return on Financial Leverage o Profit Margin o Asset Turnover o Gross Profit Margin o Accounts Receivable Turnover o Inventory Turnover o Property Plant and Equipment Turnover o Current Ratio o Quick Ratio o Debt Equity Ratio o Times Interest Earned All of your ratios should be calculated by creating formulas in Excel that refer to the cells in your downloaded Mergent online data being used in your calculations.

Do not hard code your calculation results. You may perform any additional analysis you think is relevant in order to assess your companies. Once you have completed the above analysis, use your results and assess the profitability, liquidity and solvency performance of your two companies (1) individually over time and (2) compared to each other. OUTPUT Synthesize the analysis you have completed into a 1,000 word report that concludes with your recommendation regarding in which company your fund should invest, and the rationale supporting your recommendation.

Your report word count will not include any of Common Size, Vertical or Ratio Analysis. You may assume the reader of the report is knowledgeable about financial analysis, so you do not have to explain how any of your calculations were made. Consider the inclusion of graphics to enhance the delivery of your material. Your written report should be submitted as a MS Word file. Your analyses must be submitted as an MS Excel file. A complete set of only four years’ ratios can be calculated.

This is because for any ratios where one component is based on a balance sheet amount and the other is based on an income statement amount will require that the balance sheet figure be averaged. 2 APPENDIX I Symbol CTC.A CCL.B GIL MG QSR ATD.B DOL WN L MRU SAP CNR CP SNC TRI WCN GIB.A CSU OTEX SHOP Company Canadian Tire Corporation Limited CCL Industries Inc. Gildan Activewear Inc. Magna International Inc. Restaurant Brands International Inc. Alimentation Couche-Tard Inc. Dollarama Inc. George Weston Limited Loblaw Companies Limited Metro Inc. Saputo Inc. Canadian National Railway Company Canadian Pacific Railway Limited SNC-Lavalin Group Inc. Thomson Reuters Corporation Waste Connections Inc. CGI Inc. Constellation Software Inc. Open Text Corporation Shopify Inc. Sector Consumer Cyclical Consumer Cyclical Consumer Cyclical Consumer Cyclical Consumer Cyclical Consumer Staples Consumer Staples Consumer Staples Consumer Staples Consumer Staples Consumer Staples Industrials Industrials Industrials Industrials Industrials Information Technology Information Technology Information Technology Information Technology Powered by Clearbit Metro Inc (TSX: MRU) Due to changes with International Financial Reporting Standards (IFRS), recent financials statement presentations have been adjusted to meet this standard.

Please note the original historical presentations have remained in the original format Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 09/26/202 0 CAD Not Qualified 09/28/201 9 CAD Not Qualified 09/29/201 8 CAD Not Qualified Yes Thousan ds Cash & cash equivalents 441500 Accounts receivable 641800 Accounts receivable on subleases 88000 Inventories 1268200 Prepaid expenses 45000 Current taxes 16000 Total current assets before assets held for sale Total current assets 2500500 Investments in an associate Fixed assets, gross 4502300 Less: accumulated depreciation & impairment -1641500 Fixed assets, net 2860800 Investment properties 40200 Right-of-use assets 1150500 Intangible assets 2850200 Goodwill 3300700 Deferred taxes 43500 Defined benefit assets 19700 Investment at fair value Accounts receivable on subleases 596300 Other assets 61500 Total assets 13423900 Bank loans 400 Accounts payable 1458900 Yes Thousan ds 273400 611200 1126000 33200 44500 2088300 4232000 -1574200 2657800 41500 2889000 3306500 2800 25600 62400 11073900 1331400 Yes Thousan ds 226900 538100 1099100 32100 20600 1916800 4062500 -1539100 2523400 46100 2914400 3302200 4500 55100 66900 92800 10922200 100 1358500 Currency Audit Status Consolidated Scale Deferred revenues 38000 Current taxes 81700 Provisions 2500 Current portion of debt 20600 Current portion of lease liabilities 258000 Non-controlling interests Total current liabilities 1860100 Notes 2600000 Loans 47200 Obligations under finance leases Deferred financing costs -14600 Current portion -20600 Debt 2612000 Lease liabilities 1811400 Defined benefit liabilities 129900 Provisions 19200 Deferred taxes 833900 Other liabilities 2000 Non-controlling interests Total liabilities 7268500 Common shares 1713800 Capital stock.

1713800 Treasury shares -25100 Contributed surplus 22200 Retained earnings 4431300 Accumulated other comprehensive income (loss) Attributable to equity holders of the parent 6142200 Attributable to non-controlling interests 13200 Total equity 6155400 Total liabilities & equity 13423900 22300 33300 10900 428600 51100 1877600 2600000 51000 20900 -14300 -428600 2229000 113000 30200 842700 12800 5105300 1732300 1732300 -24600 19200 4228300 5955200 13400 5968600 11073900 254800 8000 13300 1634700 2600000 35200 25700 -17200 -13300 2630400 81300 22300 846500 11700 39300 5266200 1724100 1724100 -24900 20300 3918400 4900 5642800 13200 5656000 10922200 09/30/201 7 CAD Not Qualified 09/24/201 6 CAD Not Qualified Yes Thousan ds 148900 313700 856600 19000 18100 1356300 475900 3158400 -1396900 1761500 15000 389100 1973800 1900 39300 37900 6050700 1100 1036100 Yes Thousan ds 27500 306400 827500 19700 11900 1193000 1193000 396500 2965100 -1370300 1594800 25700 391700 1955400 9400 7500 32100 5606100 1400 1012800 8800 2700 12900 224300 1285900 1400000 35600 25700 -6800 -12900 1441600 92700 2000 255700 12300 36600 3126800 565800 565800 -21900 19800 2343900 3500 2911100 12800 2923900 6050700 35200 2600 15500 1067500 1231000 160700 2800 193900 12200 244800 2912900 571000 571000 -20500 19300 2106100 4700 2680600 12600 2693200 5606100 Powered by Clearbit Metro Inc (TSX: MRU) Due to changes with International Financial Reporting Standards (IFRS), recent financials statement presentations have been adjusted to meet this standard.

Please note the original historical presentations have remained in the original format Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 09/26/202 0 CAD Not Qualified 09/28/201 9 CAD Not Qualified 09/29/201 8 CAD Not Qualified Yes Thousan ds Cash & cash equivalents 441500 Accounts receivable 641800 Accounts receivable on subleases 88000 Inventories 1268200 Prepaid expenses 45000 Current taxes 16000 Total current assets before assets held for sale Total current assets 2500500 Investments in an associate Fixed assets, gross 4502300 Less: accumulated depreciation & impairment -1641500 Fixed assets, net 2860800 Investment properties 40200 Right-of-use assets 1150500 Intangible assets 2850200 Goodwill 3300700 Deferred taxes 43500 Defined benefit assets 19700 Investment at fair value Accounts receivable on subleases 596300 Other assets 61500 Total assets 13423900 Bank loans 400 Accounts payable 1458900 Yes Thousan ds 273400 611200 1126000 33200 44500 2088300 4232000 -1574200 2657800 41500 2889000 3306500 2800 25600 62400 11073900 1331400 Yes Thousan ds 226900 538100 1099100 32100 20600 1916800 4062500 -1539100 2523400 46100 2914400 3302200 4500 55100 66900 92800 10922200 100 1358500 Currency Audit Status Consolidated Scale Deferred revenues 38000 Current taxes 81700 Provisions 2500 Current portion of debt 20600 Current portion of lease liabilities 258000 Non-controlling interests Total current liabilities 1860100 Notes 2600000 Loans 47200 Obligations under finance leases Deferred financing costs -14600 Current portion -20600 Debt 2612000 Lease liabilities 1811400 Defined benefit liabilities 129900 Provisions 19200 Deferred taxes 833900 Other liabilities 2000 Non-controlling interests.

Total liabilities 7268500 Common shares 1713800 Capital stock 1713800 Treasury shares -25100 Contributed surplus 22200 Retained earnings 4431300 Accumulated other comprehensive income (loss) Attributable to equity holders of the parent 6142200 Attributable to non-controlling interests 13200 Total equity 6155400 Total liabilities & equity 13423900 22300 33300 10900 428600 51100 1877600 2600000 51000 20900 -14300 -428600 2229000 113000 30200 842700 12800 5105300 1732300 1732300 -24600 19200 4228300 5955200 13400 5968600 11073900 254800 8000 13300 1634700 2600000 35200 25700 -17200 -13300 2630400 81300 22300 846500 11700 39300 5266200 1724100 1724100 -24900 20300 3918400 4900 5642800 13200 5656000 10922200 09/30/201 7 CAD Not Qualified 09/24/201 6 CAD Not Qualified Yes Thousan ds 148900 313700 856600 19000 18100 1356300 475900 3158400 -1396900 1761500 15000 389100 1973800 1900 39300 37900 6050700 1100 1036100 Yes Thousan ds 27500 306400 827500 19700 11900 1193000 1193000 396500 2965100 -1370300 1594800 25700 391700 1955400 9400 7500 32100 5606100 1400 1012800 8800 2700 12900 224300 1285900 1400000 35600 25700 -6800 -12900 1441600 92700 2000 255700 12300 36600 3126800 565800 565800 -21900 19800 2343900 3500 2911100 12800 2923900 6050700 35200 2600 15500 1067500 1231000 160700 2800 193900 12200 244800 2912900 571000 571000 -20500 19300 2106100 4700 2680600 12600 2693200 5606100 Powered by Clearbit Saputo Inc (TSX: SAP) Due to changes with International Financial Reporting Standards (IFRS), recent financials statement presentations have been adjusted to meet this standard.

Please note the original historical presentations have remained in the original format Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 03/31/202 0 CAD Not Qualified 03/31/201 9 CAD Not Qualified 03/31/201 8 CAD Not Qualified Yes Thousan ds Cash & cash equivalents 319400 Receivables 1371800 Inventories 2220900 Income taxes receivable 50300 Prepaid expenses & other assets 106600 Total current assets 4069000 Property, plant & equipment, cost 5853500 Less: total accumulated depreciation -2003500 Property, plant & equipment 3850000 Right-of-use assets 417900 Goodwill 3219500 Intangible assets 1640700 Other assets 545300 Deferred income taxes 50700 Total assets 13793100 Bank loans 528500 Accounts payable & accrued liabilities 1838900 Income taxes payable 51400 Current portion of long-term debt Current portion of lease liabilities 74700 Total current liabilities 2493500 Unsecured bank term loan facilities 1892300 Unsecured senior notes 1650000 Finance lease obligations – Yes Thousan ds 112700 1248200 1681000 34100 57800 3133800 4799200 -1703800 3095400 2597600 876200 131600 51000 9885600 130400 1442200 36500 323400 1932500 687900 1550000 29400 Yes Thousan ds 122200 944900 1234500 52000 68800 2422400 3720400 -1500400 2220000 2417300 823100 85700 34500 8003000 193300 1068600 26500 4400 1292800 200000 1200000 25300 Currency Audit Status Consolidated Scale Long-term debt including current portion3542300 Current portion Long-term debt 3542300 Lease liabilities 340100 Other liabilities 98500 Deferred income taxes 759600.

Total liabilities 7234000 Common shares 1685700 Share capital 1685700 Reserves 778400 Retained earnings 4095000 Equity attributable to shareholders of Saputo Inc. Non-controlling interest Total equity 6559100 Total liabilities & equity 13793100 2267300 -323400 1943900 86400 502300 4465100 991700 991700 713800 3715000 5420500 9885600 1425300 -4400 1420900 66700 424900 3205300 918900 918900 662400 3216400 4797700 8003000 03/31/201 7 CAD Not Qualified 03/31/201 6 CAD Not Qualified Yes Thousan ds 250500 863200 1172500 15000 79300 2380500 3579300 -1413800 2165500 2240500 662300 99700 48100 7596600 93800 1008300 91300 1193400 – Yes Thousan ds 164300 818800 1077100 4700 110900 2175800 3342100 -1256100 2086000 2194100 587000 106500 22900 7172300 178200 896600 37100 244900 1356800 – 1500000 68900 511400 3273700 871100 871100 812700 2639100 4322900 4322900 7596600 1208300 61800 475600 3102500 821000 821000 695700 2485100 4001800 68000 4069800 7172300 Powered by Clearbit Saputo Inc (TSX: SAP) Due to changes with International Financial Reporting Standards (IFRS), recent financials statement presentations have been adjusted to meet this standard.

Please note the original historical presentations have remained in the original format Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 03/31/202 0 CAD Not Qualified 03/31/201 9 CAD Not Qualified 03/31/201 8 CAD Not Qualified Yes Thousan ds Cash & cash equivalents 319400 Receivables 1371800 Inventories 2220900 Income taxes receivable 50300 Prepaid expenses & other assets 106600 Total current assets 4069000 Property, plant & equipment, cost 5853500 Less: total accumulated depreciation -2003500 Property, plant & equipment 3850000 Right-of-use assets 417900 Goodwill 3219500 Intangible assets 1640700 Other assets 545300 Deferred income taxes 50700 Total assets 13793100 Bank loans 528500 Accounts payable & accrued liabilities 1838900 Income taxes payable 51400 Current portion of long-term debt Current portion of lease liabilities 74700 Total current liabilities 2493500 Unsecured bank term loan facilities 1892300 Unsecured senior notes 1650000 Finance lease obligations – Yes Thousan ds 112700 1248200 1681000 34100 57800 3133800 4799200 -1703800 3095400 2597600 876200 131600 51000 9885600 130400 1442200 36500 323400 1932500 687900 1550000 29400 Yes Thousan ds 122200 944900 1234500 52000 68800 2422400 3720400 -1500400 2220000 2417300 823100 85700 34500 8003000 193300 1068600 26500 4400 1292800 200000 1200000 25300 Currency Audit Status Consolidated Scale Long-term debt including current portion3542300 Current portion.

Long-term debt 3542300 Lease liabilities 340100 Other liabilities 98500 Deferred income taxes 759600 Total liabilities 7234000 Common shares 1685700 Share capital 1685700 Reserves 778400 Retained earnings 4095000 Equity attributable to shareholders of Saputo Inc. Non-controlling interest Total equity 6559100 Total liabilities & equity 13793100 2267300 -323400 1943900 86400 502300 4465100 991700 991700 713800 3715000 5420500 9885600 1425300 -4400 1420900 66700 424900 3205300 918900 918900 662400 3216400 4797700 8003000 03/31/201 7 CAD Not Qualified 03/31/201 6 CAD Not Qualified Yes Thousan ds 250500 863200 1172500 15000 79300 2380500 3579300 -1413800 2165500 2240500 662300 99700 48100 7596600 93800 1008300 91300 1193400 – Yes Thousan ds 164300 818800 1077100 4700 110900 2175800 3342100 -1256100 2086000 2194100 587000 106500 22900 7172300 178200 896600 37100 244900 1356800 – 1500000 68900 511400 3273700 871100 871100 812700 2639100 4322900 4322900 7596600 1208300 61800 475600 3102500 821000 821000 695700 2485100 4001800 68000 4069800 7172300 Powered by Clearbit Metro Inc (TSX: MRU) Due to changes with International Financial Reporting Standards (IFRS), recent financials statement presentations have been adjusted to meet this standard.

Please note the original historical presentations have remained in the original format Exchange rate used is that of the Year End reported date As Reported Annual Income Statement Report Date Currency Audit Status 09/26/2020 CAD Not Qualified 09/28/2019 CAD Not Qualified Consolidated Yes Scale Thousands Sales 17997500 Cost of sales Wages & fringe benefits Employee benefit expense Rents & occupancy charges Other expenses Cost of sales & operating expenses -16306400 Loss on disposal of a subsidiary -7500 Retail network restructuring expenses Gain on divestiture of pharmacies Pharmacy network closure & restructuring expenses Distribution network modernization project expenses Operating income before depreciation & amortization & associate’s earnings 1683600 Depreciation & amortization -462500 Current interest -3100 Non-current interest -103400 Net interest on lease liabilities -34900 Interests on defined benefit obligations net of plan assets -4000 Amortization of deferred financing costs -2400 Interest income 11200 Passage of time -200 Financial costs, net -136800 Share of an associate’s earnings Gain on disposal of the majority of the investment in an associate Gain on revaluation & disposal of an investment at fair value Earnings before income taxes 1084300 Income taxes -287900 Net earnings 796400 Net earnings attributable to equity holders of the parent 795200.

Net earnings attributable to non-controlling interests 1200 Weighted average shares outstanding – basic 252100 Weighted average shares outstanding – diluted 253300 Yes Thousands 16767500 -15416000 -36000 6000 1321500 -286400 -2900 -103500 -2100 -2900 7800 -200 -103800 36400 1500 969200 -254800 714400 711600 2800 254900 256300 Year end shares outstanding Net earnings per share – basic Net earnings per share – fully diluted Dividends per share Total number of employees 250243 3.15 3.14 0.875 90000 253863 2.79 2.78 0.78 90000 09/29/2018 CAD Not Qualified 09/30/2017 CAD Not Qualified 09/24/2016 CAD Not Qualified Yes Thousands 14383400 -13329500 -31400 -11400 1011100 -233500 -4300 -99000 -3200 -2200 28800 -300 -80200 30800 1107400 241100 2076700 -358200 1718500 1716500 2000 238300 239800 Yes Thousands 13175300 -10579600 -711000 -80800 -441400 -396100 -12208900 966400 -194200 -3000 -57400 -4600 -900 2400 -400 -63900 93500 801800 -193400 608400 591700 16700 228700 230600 Yes Thousands 12787900 -10271100 -697800 -77800 -420700 -389200 -11856600 931300 -182800 -5800 -54400 -3700 -900 3700 -300 -61400 91100 778200 -192000 586200 571500 14700 237100 239300 255650 7.2 7.16 0.703 90000 227140 2.59 2.57…

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