The financial statements of The North West Company Inc. are presented in Appendix A followed by the

Question:

The of The North West Company Inc. are presented in Appendix A followed by the for Sobeys Inc. in Appendix B.
Instructions
(a) Calculate the liquidity ratios for the current fiscal year that you believe are relevant for each company. Assume all sales are on credit and that there is no allowance for doubtful accounts. Which company is more liquid?
(b) Calculate the ratios for the current fiscal year that you believe are relevant for each company. Which company is more solvent?
(c) (1) Sobeys reported a loss from operations and a net loss for the year ended May 7, 2016. Do you believe it is still appropriate to calculate and compare profitability ratios for North West when that company reported income from operations and net income for its current fiscal year? Explain.
(2) Do you believe it would be appropriate to exclude certain nonrecurring items from your analysis to improve the comparison? If so, identify which, if any, nonrecurring items you would remove for North West and Sobeys.
(d) Identify information that is not included in the that might also be useful for comparing North West and Sobeys.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Solvency
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...