BAT4M Unit 8 - Summative Activity

Annual Report Analysis Introduction

you will analyze the 2022 and 2021 annual reports of Canadian Tire Corporation. The site at which you may find the annual reports is: Canadian Tire Corporation Once you are on this site, use theFinancial Reporting menuto locate theAnnual Disclosures for 2022 and 2021. Your final report should be presented in a word processing document with accompanying spreadsheets. It should include a title page and be presented in a neat and organized manner.

Using the spreadsheet template provided, make a horizontal analysis of the consolidated income statement (from Revenue to Net Income). Calculate the increase or decrease in each account and from 2021 to 2022, in both $ and %. All of the required numbers to calculate this may be found on the Consolidated Statements of Income for 2022 - p. 81

Vertical Analysis

Using a spreadsheet, make a vertical analysis of the 2021 and 2022 balance sheet amounts for Total Current Assets, Total Assets, Total Current Liabilities, Total Liabilities, Total Equity, Total Liabilities & Equity. Calculate the component % for each of the totals listed above as a % of total assets). The required numbers for this may be found on p. 80 of the 2022 Consolidated Balance Sheets.

Part 3 - Conclusion

In this section, you will use the information you gathered and analyzed in the first two sections to compare and contrast the results of 2021 & 2022.

a) Explain in which year, 2021 or 2022, that Canadian Tire Corporation was more successful in terms of the items listed below. Be sure to use information from the annual reports and the answers from calculations carried out in Part 2 of the assignment to support your answers.

i) Profitability

ii) Solvency (ability to pay debts)

iii) Shareholder Returns/Value

Canadian Tire Corporation
Income Statement
For the Years Ending
	2022	2021	Increase/Decrease	% Change
Revenue
Cost of Producing Revenue (COGS)
Gross Margin (Gross Profit)
Selling, General & Admin Expenses
Net Finance Costs
Income Before Income Taxes
Income Taxes
Net Income

Canadian Tire Corporation		Canandian Tire Corporation
Balance Sheet Amounts		Balance Sheet Amounts
2022		2021
	2022			2021
	$	%			$	%
ASSETS		ASSETS
Current Assets				Current Assets
Total Assets				Total Assets
LIABILITIES AND SHAREHOLDERS EQUITY		LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities				Current Liabilities
Total liabilities				Total liabilities
Total Shareholders Equity				Total Shareholders Equity
Total Liabilities and				Total Liabilities and
Shareholders Equity				Shareholders Equity

Canadian Tire Corporation
Ratio Analysis
Ratio	Formula	2021	2022
Calculation	Answer	Calculation	Answer
Liquidity Ratios:
Current Ratio	Current Assets / Current Liabilities
Profitability Ratios:
Profit margin	Net Income / Net Revenue
Return on assets	Net Income / Ave. Total Assets
Return on equity	Net Income / Ave. Total Shareholders Equity
Earnings per share	Net Income attributable to shareholders / Weighted Ave. Number of Shares Outstanding
Solvency Ratios:
Debt to Total Assets	Total Liabilities / Total Assets