Refer to the financial statements of Canadian Tire Corporation (Appendix A) and RONA Inc. (on Connect) and

Question:

Refer to the of Canadian Tire (Appendix A) and RONA Inc. (on Connect) and the Industry Ratio Report (Appendix B on Connect).
Required:
1. Compute the ratio of property, plant, and equipment (net) to total assets, for both companies each year. Why might the companies’ ratios differ?
2. Compute the percentage of the gross amount of property, plant, and equipment that has been depreciated for each company for the most recent year. Why do you think the percentages differ?
3. Compute the fixed ratio for the most recent year presented for both companies. Which has the higher efficiency in using assets? Why?
4. Compare the fixed ratio for both companies to the industry average. Are these companies doing better or worse than the industry average in asset efficiency? 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... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio. Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...