Go to Connect for the financial statements of RONA Inc.
Required:
1. The company distributes its products to franchisees and sells directly to consumers. What items would you expect to be subtracted from sales revenue in the computation of net sales?
2. What expenses does RONA subtract from net sales in the computation of earnings before income taxes? How does this differ from Canadian Tire’s practice?
3. Compute RONA’s receivables turnover ratio for the year ended December 30, 2012. What characteristics of its business might cause it to be so high?
4. What was the change in trade receivables and how did it affect the cash provided by operating activities for 2012?