Access the 2012 consolidated financial statements for CAE Inc. by going to the investor relations section of the company’s website. Answer the same questions as in Problem 1. For each question, indicate where in the financial statements you found the answer, and/or provide a brief explanation.
In Problem 1
Access the 2012 consolidated financial statements for Empire Company Limited by going to the investor relations section of the company's website. Answer the questions below. For each question, indicate where in the financial statements you found the answer, and/or provide a brief explanation.
(a) How does the company report its interest in companies it controls through means other than majority share ownership?
(b) What impact does the consolidation of special-purpose entities or variable interest entities have on the company's debt-to-equity ratio?
(c) What percentage of the company's net income is derived from investments in jointly controlled entities?
(d) What percentage of the company's assets is through investments in jointly controlled entities?
(e) Until 2013, jointly controlled entities could be reported using proportion ate consolidation or the equity method. What method of reporting did the company use in the current year? If it had used the other method, what would have been the impact on its debt-to-equity ratio and return on-equity ratio? Briefly explain.
(f) How would a bank change its assessment of the risk and solvency of the company based on the change in the debt-to-equity ratio?
(g) What were the statutory and effective tax rates on income from continuing operations? Identify the two biggest factors that caused these two rates to be different.