The financial statements for Shoppers Drug Mart Corporation are presented in Appendix C at the end of the text.
Instructions
1. Determine the following measures for the fiscal years ended December 31, 2011, and January 1, 2011, rounding to one decimal place. Industry averages are provided in parentheses after each ratio.
a. Current ratio (1.35:1)
b. Quick ratio (0.65:1)
c. Accounts receivable turnover (13.6 times)
d. Inventory turnover (11.4 times)
e. Total asset turnover (1.9 times)
f. Debt ratio (48%)
g. Times interest earned ratio (6.6 times)
h. Profit margin (3.0%)
i. return on assets (5.7%)
j. Return on shareholders' equity (11.1%)
2. Compare the liquidity, efficiency, solvency, and profitability of Shoppers Drug Mart Corporation to the prior year and to the industry averages.
3. Assess whether Shoppers Drug Mart Corporation's financial situation is improving or declining from the prior year.