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Case Information: Aritzia Inc.

The objective of this exercise is to develop your ability to perform a comprehensive analysis on a set of financial statements. Use the 2022 annual report of Aritzia Inc. (year ended February 27, 2022) from the websitehttps://investors.aritzia.com. Go to the Financial Reports section and click on Fiscal Year 2022.

Requirement 3

Evaluate the company's ability to sell inventory and pay debts during 2022 and 2021. In your analysis, you should compute the following ratios, and then comment on what those ratios indicate. Since the 2022 annual report only includes the balance sheets for 2022 and 2021, you will need to look up the annual report for 2021 for information about 2020 accounts receivable, inventory, and accounts payable.

2. Accounts receivable turnover
4. Inventory turnover
6. Accounts payable turnover and days' payable outstanding
8. Cash conversion cycle
10. Current ratio
12. Quick (acid-test) ratio
14. Debt ratio

Requirement 4

Evaluate Aritzia's cash flow.

2. For 2022, is Aritzia's net cash flow from operations greater than or less than net income? What is the primary cause of the difference?
4. For 2021 and 2022, what is the primary source of cash from investing activities? What is the primary use of cash from investing activities for 2021 and 2022?
6. For 2021 and 2022, what is the primary source of cash from financing activities? What is the primary use of cash from financing activities for 2021 and 2022?
8. What trend(s) do you detect from this analysis?

Requirement 5

Evaluate Aritzia's shares as an investment.

2. What was the closing market price of Aritzia's shares on February 28, 2022, the next trading day after the balance-sheet date of February 27, 2022? Google Aritzia's stock price on Yahoo Finance Aritzia's ticker symbol is ATZ.TO.
4. Compute the price-earnings ratio using your EPS calculation and the market price you just determined.

Based on Management's Discussion and Analysis (annual report) as well as any business news (Google Finance is an example), would you evaluate the company's shares as a "buy," "hold," or "sell"? State your reasons.