Question 6

Selected financial data for a recent year for two clothing competitors, Le Chteau Inc. and Reitmans (Canada) Limited, are presented here (in thousands, except share price):

		Le Chteau		Reitmans
Current assets		$116,724		$319,362
Total assets		168,490		542,083
Current liabilities		36,038		121,172
Total liabilities		108,136		160,915
Loss to common shareholders		(35,745)		(24,703)
Share price		$0.27		$3.96
Weighted average number of common shares		29,964		64,079

For each company, calculate the following values and ratios. Where available, industry averages are included in parentheses. (Round basic earnings per share to 2 decimal places, e.g. 5.25 and round all other amounts to 1 decimal places, e.g. 5.2 or 5.2%. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any answer field blank. Enter 0 for not applicable amounts.)

1.Working capital (n/a)

2.Current ratio (1.8:1)

3.Debt to total assets (57%)

4.Basic earnings per share (n/a)

5.Price-earnings ratio (20.0 times)

	Le Chateau	Reitman's
working capital	$_____	$_____
current ratio	______;1	______;1
debit to total assets	______%	______%
basic earnings per share	$_____	$_____
price-earnings ratio	______ times	______ times

Compare the liquidity, solvency, and profitability of the two companies and their industry. (If a comparison cannot be made, enter Not Meaningful as the answer.)

Below fill out the profitability of the two companies decides whether it is more or less liquid:

	Le Chateau	Reitmans
Liquidity	Is it more liquid or less liquid	Is it more liquid or less liquid
solvency	Is it more liquid or less liquid	Is it more liquid or less liquid
profitability	Is it more liquid or less liquid	Is it more liquid or less liquid

Below fill out the comparison with industry and decides whether it is better or worse than the industry average:

	Le Chateau	Reitmans
Liquidity	Worse or better than industry average	Worse or better than industry average
Solvency	Worse or better than industry average	Worse or better than industry average
Profitability	Worse or better than industry average	Worse or better than industry average