Shoppers Drug Mart Corporation is a licensor of over 1,170 full-service retail drug stores across Canada. The 2009 consolidated statement of earnings, balance sheet, and excerpts from the statement of cash flows for Shoppers Drug Mart are shown in Exhibit 12-12 (amounts in thousands).
In Exhibit 12-12
CONSOLIDATED BALANCE SHEETS

Required:
Based on these financial statements, answer each of the following questions:
a. Calculate the following ratios for both 2009 and 2008, and comment on the changes. For the 2008 ratios, use the year-end balance sheet amounts, rather than an average for the year.
i. ROA (split into profit margin percentage and total asset turnover rate)
ii. ROE (no preferred shares outstanding)
iii. Times interest earned
iv. Operating cash flow to short-term debt
b. Comment on the use of leverage by Shoppers Drug Mart, using appropriate ratios to support your analysis.
c. The balance sheet of Shoppers Drug Mart includes intangible assets, which includes prescription files, developed technology, customer relations, and goodwill. How significant is the impact of these assets on the ROA calculated above? As a potential investor, would you have any particular concerns about the extent of intangible assets? Explain.

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s at January 2, 2010 and January 3, 2009 n thousasich of dallar 2001 2008 Assets Curtent 44,391 471,029 1,852.441 Cash 36,56 448,476 1.743 253 8,835 Accounts recevable Inventory (Note ncorne taxus recoverable Future income laxes (Notes 2 and 5) 86,161 75,573 2,529,595 1,566,024 2,481,353 258,766 16,716 Preceid expenses and deposits (Notes 2 and 4) 59,327 Property and equipment INozes 2 and 7 Goodwill (Notes 2 and 8) ntangible assets (Notes 2 and 9) Other assets Note 2) Total assets 2.381 228 1.331,363 2427,239 212,279 12,114 S 6,852,454 6,364.228 Liabilities Current 5 240,844 339,943 197,845 1.018.505 $ 270,332 260,386 Bank indebtedness (Nate 10) Commercial paper (Note 10 Short-term debt (Note 10 Accounts payable and accrued liabilities Income taxes payable Dividends payable 964,736 17,046 46,748 1,559,248 946,098 347 951 42,858 2.896,155 46:709 1,843,846 647,250 Long-term debt (Note 11) Other long-term liabilities tNote 12 Future incore taxes Nate 6 30,803 2,825,016 130,189 118,678 Assóciate interest Shareholders equity Share capita (Ncte 13) Cuntributed surpius (Note 14 1,519,870 10,274 1,524,207 10.625 Accumulated other comprehensive loss Note 18) Retained earnings (Note 2) (1,125) 2,297,091 2,295,966 3,826,110 3.442 1,899.139 1,895.697 3.420,529 Total liabilities and sharoholders equity 6,852454 6,364 223