Access the 2011 consolidated financial statements for Rogers Communications Inc. by going to the investor's relations section of the company's website. Answer the questions below. Round percentages to one decimal point and other ratios to two decimal points. For each question, indicate where in the financial statements you found the answer, and/or provide a brief explanation.
(a) What method was used to account for business combinations?
(b) Describe the most significant business acquisition during the year. Was it a purchase of net assets or shares?
(c) How much cash was paid for all business acquisitions during the year?
(d) In the allocation of the acquisition cost for the most significant business acquisition, what amounts were allocated to (i) intangible assets and (ii) goodwill?
(e) What percentage of total assets at the end of the year is represented by (i) intangible assets and (ii) goodwill?
(f) Assume that the company had paid 10% more for its acquisitions of 100%-owned subsidiaries, and that the extra amount was paid in cash.
How would this have affected the (i) current ratio and (ii) debt-to-equity ratio at the date of acquisition?
(g) Assume that the market capitalization of the company's shares (i.e., number of shares outstanding times market value per share) was double the carrying amount of shareholders' equity on the date when the business acquisitions occurred, and that the company uses the new-entity method to account for business combinations. How would this have affected the
(i) Debt-to-equity ratio at the date of acquisition and
(ii) The return on equity for the first year after the date of acquisition?