Question

Base your answers to the following questions on the 2014 financial statements for Le Château Inc. in Exhibits 1-10A to C.
Exhibit 1-10b LE CHATEAU INC.’S 2013 CONSOLIDATED STATEMENTS OF LOSS
Years ended January 25, 2014 and January 26, 2013
[In thousands of Canadian dollars, except per share information]
In the questions below, the year 2014 refers to Le Château’s fiscal year ended January 25, 2014, and the year
2013 refers to the prior year ended January 26, 2013.
Required:
a. Le Château has issued consolidated financial statements. What does the word consolidated at the top of a financial statement tell you about the company’s structure?
b. Le Château prepared a classified statement of financial position. Calculate the difference between current assets and current liabilities at the end of 2014, and at the end of 2013.This amount is referred to as working capital. Did the company’s working capital improve in 2014? Explain.
c. Find the following amounts in Le Château’s statements (note that the amounts are in thousands of Canadian dollars):
i. Sales revenues in 2014
ii. Cost of sales in 2014
iii. Finance costs (cost of debt) in 2013
iv. Income tax expense (recovery) in 2014
v. Net income (loss) in 2013
vi. Intangible assets at the end of 2014
vii. Trade receivables (accounts receivable) at the beginning of 2014
viii. Share capital at the end of 2014
ix. Property, plant, and equipment at the end of 2014
x. Cash flows from operating activities in 2014
xi. Cash payments to acquire intangibles and property, plant, and equipment in 2013
xii. Cash used for the payment of dividends in 2013
xiii. Cash produced from or used for financing activities in 2014
d. Did Le Château finance the company’s assets mainly from creditors (total liabilities) or from shareholders (shareholders’ equity) in 2014? Support your answer with appropriate calculations.
e. List the two largest sources of cash and the two largest uses of cash in 2014. (Consider cash generated from operating activities to be a single source or use of cash.)
f. Suggest some reasons why there was a loss of approximately $15,986 thousand in 2014, yet cash generated from operating activities was only a negative (or outflow of) $3,356 thousand.


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  • CreatedJune 11, 2015
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