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The following information (dollars in millions) is for Canadian Tire Corporation, Limited. Instructions a. Calculate the gross

Question:

The following information (dollars in millions) is for Canadian Tire Corporation, Limited.

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Instructions

a. Calculate the gross profit margin, profit margin, and current ratio for Canadian Tire for 2017, 2016, and 2015.

b. Comment on whether the ratios have improved or deteriorated over the three years.

What other information would be useful when evaluating these ratios over the threeyear period?

Transcribed Image Text:

2016 Current assets Current liabilities Net sales Cost of goods sold Profit (loss) 2017 $8,796.1 4,519.3 13,434.9 8,796.5 818.8 $ 8,637.7 4,680.9 12,281.0 8,288.5 747.5 2015 $ 8,692.3 3,883.8 12,279.6 8,144.3 735.9

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a amounts in millions 2017 2016 2015 Gross profit margin 3453 134349 87965 134349 3251 122810 82885 ...View the full answer


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Related Video

The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.

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