All questions for this assignment are based on the company Canada Goose Inc. 1. (12 marks) Provide
Question:
All questions for this assignment are based on the company Canada Goose Inc.
1. (12 marks) Provide brief answers for each of the following questions, based on the most recent annual reports for Canada Goose Inc. Be sure to clearly indicate where you found the information you based your responses on. a) What accounting standards does the company use? (e.g. US GAAP, IFRS, Canadian GAAP, etc.) b) Who are the company's auditors? c) Are there any concerns raised by the auditors in their report? d) On what exchange or exchanges do the company's shares trade? 2. (20 marks) Enter the financial statements into an Excel spreadsheet. This will make your results easier to calculate. However, be sure to also clearly show in your discussion how you did your calculations. For Canada Goose Inc. a. present common size Balance Sheets for 2023, 2022, and 2021. In addition, respond to the following questions: i. Have any of Canada Goose's current assets or non-current assets as percentages of total assets changed significantly from 2021 to 2023? What do you think has caused these changes? ii. Has Canada Goose's financial leverage increased or decreased? By how much? Show calculations. iii. What might be the implication of any changes in financial leverage? b. Prepare and present common size Income Statements for 2023 and 2022. i.Comment on any significant changes in profitability over the last few years.
- (20 marks) DuPont analysis.
- Calculate the Return on Equity (ROE) for 2023 and 2022.
- Disaggregate ROE into its two parts Return on Assets and Financial Leverage for each year.
- Disaggregate ROA into its two parts Profit Margin and Asset Turnover for each year.
- How do each of the following affect (increase or decrease) Canada Goose's ROE from 2022 to 2023?
- Profit margin
- Asset turnover
- Financial leverage
- Compute the adjusted ROA (see Analyst Adjustment 3.1 in your text). Use you own words to explain the difference between ROA and adjusted ROA. Assumes the statutory tax rate is 25% in 2023.
- (20 marks) Operating focused analysis.
- Calculate Net Operating Profit After Taxes (NOPAT) for 2023 and 2022. You may assume a statutory tax rate of 25%.
- Calculate Net Operating Assets (NOA) for 2021 to 2023. Make sure you review the related notes to the financial statements to determine if an account is operating or non-operating or may contain both operating and non-operating items.
- Calculate Return on Net Operating Assets (RNOA) for 2023 and 2022.
- Has Canada Goose's return from its operating activities changed significantly from 2022 to 2023? Comment.
- (18 marks) Liquidity Analysis: Compute the following ratios for Canada Goose for both 2022 and 2023. Show details of your computations clearly. You may need to use a previous balance sheet when an average amount is required for a ratio. If any information is used that is not reported in the financial statements themselves, identify where you found it, such as the footnote number for instance, or other reference.
- Accounts Receivable Turnover ratio and Days Average Account Receivable Outstanding.
- Inventory Turnover and Average Inventory Days Outstanding.
- Accounts Payable Turnover and Days Average Accounts Payable Outstanding.
- Cash Conversion Cycle.
- Has Canada Goose's liquidity changed from one year to the next? Do you have any concerns regarding their liquidity? Support your answer.
- On what basis does the company value their inventory? E.g. FIFO, LIFO, or something else. Be sure to indicate where you found this information.
- (5 marks) As of the company's fiscal year-end for 2023 and 2022 what was its market capitalization? That is, determine the number of shares outstanding as of year-end and multiply by the share price on that date for each year.
- (5 marks) "A luxury goods company like Canada Goose ismore likely to do extra well when the economy is booming and do very poorly when the economy moves into a recession. That is, it's earnings are likely to be more volatile than the average company in the economy." Do you agree with this statement? Why or why not?
Data Modeling and Database Design
ISBN: 978-1285085258
2nd edition
Authors: Narayan S. Umanath, Richard W. Scammel