Canadian Tire Corporation, Limited is one of Canada's best-known retailers. The company operates 493 hard-goods retail stores
Question:
Canadian Tire Corporation, Limited is one of Canada's best-known retailers. The company operates 493 "hard-goods" retail stores through associate dealers, 383 corporate and franchise stores under its subsidiary Mark's Work Wearhouse, 297 independently operated gasoline sites, and 436 FGL Sports retail stores (operating under banners including Sport Chek, Sports Experts, and Atmosphere). It offers financial services through its branded credit cards and now provides personal loans and a variety of insurance and warranty products.
Instructions
Access the financial statements of Canadian Tire Corporation, Limited for its year ended January 3, 2015, either on the company's website or the SEDAR website (www.sedar.com). Refer to these financial statements and their accompanying notes to answer the following questions.
(a) How does Canadian Tire define cash and cash equivalents on its statement of financial position? What is included in the cash and cash equivalents balance at January 3, 2015 (referred to as "2014")?
(b) What criteria does the company use to determine what short-term investments to include in this category?
(c) Review the financial statements and notes and identify the assets reported by Canadian Tire that qualify as loans and receivables. Does the company disclose the amount of its allowance for doubtful accounts? What was the amount of impairment for credit losses for the year? How does the company determine its allowance for impairment? Be specific. What were the amounts for the write offs, recoveries, and impairment for credit losses for the year?
(d) When is a loan impaired? How is an impaired loan valued by Canadian Tire? Be specific.
(e) Accounting standards require companies to disclose information about their exposure to credit risk. What is credit risk? What does Canadian Tire report? What is your assessment of its exposure to credit risk?
(f) Canadian Tire uses its accounts receivable to generate cash before the receivables are due via securitization. Briefly describe the forms of "securitization" activities that the company uses. Does Canadian Tire have a continuing relationship with the accounts?
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
a Canadian Tire Corporation defines cash and cash equivalents as cash plus highly liquid and rated certificates of deposit or commercial paper with an original term to maturity of three months or less ...View the full answer
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
