To answer the questions below, you will need to locate the most current financial statements of a

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Question:

To answer the questions below, you will need to locate the most current financial statements of a Canadian public company in one (1) of these four (4) industries:

Oil and gas

Transportation

Manufacturing

Retail Sales (any category)

Once you have selected the company, use the information in the financial statements to answer the following:

Part A:

A. Prepare a brief explanation about company selected. For example, what is the name, the main operating activity, industry, future outlook, etc. Briefly explain where you obtained this information and why it is considered credible.

B. Prepare a brief explanation about the Auditor’s Opinion of the Consolidated Financial Statements. What does it communicate to the users of these statements and why is it important?

C. Review the consolidated statement of cash flows and explain why it is of significance to financial statement users.

Interpret the company’s consolidated statement of cash flows by identifying two (2) items in each of the Operating, Investing, and Financing Activities sections that may provide insight into how your company provided or used cash within its fiscal year (i.e., How did the company use or provide cash during the fiscal year?).

D. Identify and explain two (2) cash flow challenges and/or opportunities you feel would be important to discuss further with management. (i.e. questions you may want to ask management about specific cash transactions within the cash flow statement). Identify what they are and explain why they are important.

Part B:

1. Perform a horizontal analysis of the Statement of Financial Position (Balance Sheet) and Statement of Earnings (Income Statement). Summarize and explain the results incorporating your findings.

2. Review the Statement of Financial Position and Statement of Operating Income and comment on the financial performance in terms of liquidity, profitability, and solvency to answer the following:

A. Calculate two (2) financial ratios in each of the above categories for a total of six (6) results.

B. Explain the purpose of each analysis category AND whether the results are favorable or unfavorable and why.

C. Based on your findings, assess how well the company is conditioned and positioned financially. Be sure to support your recommendation with your results.

Part C

Refer to the Notes of the Financial Statements and provide a brief description:

a. of two (2) elements of the IASB Conceptual Framework used within this section.

b. of the depreciation method(s) used for the capital assets. Additionally,

i. explain why property, plant, and equipment assets are depreciated and the impact it has on the Statement of Income and,

ii. identify the factors that influence the choice of depreciation method and explain why this is an important decision for management to make. You may want to consider the nature of the business activities or industry your company is a part of.