Sun-Rype Products Ltd. is a Canadian juice and fruit snack company based in Kelowna, British Columbia. Its sales grew from \(\$ 73\) million when it became a public company in 1996 to \(\$ 125\) million in 2009. Sun-Rype's financial statements for 2008 and 2009 are shown on the next few pages.

Required:

1. Examine Sun-Rype's statements of financial position. Identify the four largest changes in the carrying amount of assets, liabilities', and shareholders' equity between the statement of financial position dates. What type of transactions could have caused the changes in the carrying amount of these items?

2. The carrying amounts of the assets and liabilities reported on the company's statement of financial position reflect a mix of historical acquisition costs, amortized costs and fair values. Refer to the notes to the company's financial statements for fiscal year 2009 that are available on the company's website (http://ir.sunrype.com) and identify the valuation bases used by the company for financial reporting purposes.
3. Using information from the company's statements of financial position and income statement for 2009 , can you determine the amount of cash flow generated from operations? If not, where can one find such information?
4. Compute the following ratios for fiscal years 2008 and 2009: debt-to-equity, total asset turnover, return on assets, return on equity, and net profit margin. Use the results of your computations to comment on the company's financial situation and profitability of its operations in both years. Sun-Rype's total assets and shareholders' equity at December 31,2007 , amounted to \(\$ 56,884\) and \(\$ 41,023\), respectively.
5. Suppose that you are evaluating Sun-Rype's financial statements for a potential investment in the company's shares. To what extent is the information contained in these financial statements relevant for your decision? What additional information would you require before making your decision?

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Assets Current Cash SUN-RYPE PRODUCTS LTD. Statements of Financial Position (thousands of dollars) Trade receivables Unrealized foreign exchange gain on currency contracts Income taxes recoverable Inventories (Note 3) Pregal expenses Property, plant, and equipment (hote 4) Dcc. 31, 2009 Dec. 31, 2008 $ 2,411 14,811 $ 625 11.930 718 21,614 8.387 27,378 594 554 39,430 45,492 21,556 25,130 $60,986 $73,622 Liabilities and Shareholders' Equity Current Bank operating loan (Note 5) Promissory note payable (Note 6) Trade payable and accruec l'ab lities Income taxes payable Unrealized foreign exchange loss on currency contracts. Future income taxes (Nota) Current portion, cligation under capital leases (Note 8) S $12,554 400 15,809 15,229 10 2.808 77 11 101 27 Current partion, long-term obligations (Nate B) 220 Current portion, long-tarm debt (Note 10 1,500 1,500 20,305 30,011 Obligation under capital leases (Note 5) 294 395 Long-term obligations (Note 9) 145 Long-term debt (Nata 10) 3,250 12,750 Future income taxes (Note 7)) 1,392 1,343 25.241 44,644 Shareholders' Equity Share capital and contributos surplus (Note 11) 18,598 18,698 Retained earnings 17,047 10,280 35,745 28.978 $60,986 $73.622 Commitments guarantees and cent ngencies (Note 17) Approved by the Board (signature) (signature) D. Selman, Director M. J. Korenberg, Director