Loblaw Companies Ltd. is Canada's largest food and pharmacy firm, with sales in 2019 over $48 billion. It is represented in all provinces. President's Choice brand-name products, the Real Canadian Superstore, and Shoppers are all part of Loblaw, which has George Weston Limited as its majority shareholder. The food business operates on very narrow margins. In 2019, Loblaw's operating profit was $2.3 billion, about 4.7 percent of sales. Net earnings were $1.1 billion, for a profit margin of about 2.4 percent (formula 3-1). What is striking about Loblaw in comparison to companies in other industries is the large investment in current assets. In 2019, over $11.3 billion was invested in current assets, with almost half invested in inventory. Current assets were about the same magnitude as capital assets. Like many corporations, Loblaw had built up and was sitting on a cash hoard of $1.1 billion in cash. To finance this position in current assets, Loblaw relied heavily on its suppliers with accounts payable at $5.3 billion. In comparison to shareholders' equity of $11.3 billion, the suppliers of short-term capital also had a significant stake in the firm. Net working capital (current assets less current liabilities) was $2.1 billion, whereas in 2000 it had been a negative $291 million. Loblaw tries to maintain a balance between its current assets and liabilities, although the shift to a positive net working capital position is possibly due to supply chain management problems at Loblaw, the new pharmaceutical inventory mix, and the cash hoarding of corporations in recent years. As Loblaw is not in the manufacturing or "growing" business as a distributor, its primary investment is In its inventories. On a continuing basis, inventories, accounts receivable, and accounts payable are perhaps the most significant components of Loblaw's balance sheet. In a business with a low profit margin, it is important that Loblaw maintain a high degree of liquidity in these assets. 

Q1 What is Loblaw's latest working capital position?

Q2 Have the margins at Loblaw improved or deteriorated?

Q 3 How does Loblaw compare to Sobeys (part of Empire Co.)?