Canadian National Railway (CNI)	Canadian Pacific Railway (CP)
From the Stock Quote
Current Share Price	113.73	370.19
Current P/E Ratio	23.09	23.31
From the Income Statement
Total Sales and Revenue	13.75	7.77
Total Net Income (or Total Net Earnings)	3.41	2.31
Basic Earnings per common share (Diluted Normalized EPS)	5.28	17.85
From the Balance Sheet
Value of Cash and Short-Term Investments	0.06	0.13
Value of Accounts Receivable	0.03	0.81
Value of Total Current Assets	2.83	1.21
Value of Total Assets	45.16	22.37
Value of Total Current Liabilities	4.29	2.29
Value of Total Liabilities	25.74	15.30
Value of Total Shareholders Equity	18.04	7.07
Total number of Common Shares outstanding	0.71	0.14
From the Statement of Cash Flows
Total value of Cash provided by Operating activities	5.68	2.85
Total value of Cash provided by Investing activities	-3.20	-1.98
Total value of Cash provided by Financing activities	-2.45	-0.84

CNI CALCULATIONS:

Liquidity ratios

1. Current Ratio

Current assets / Current liabilities

2.83/4.29 = 0.66

2. Net Working Capital

Current assets current liabilities

2.83 4.29 = 1.46

Efficiency and Working Capital Ratios

3. Accounts Receivable Days

Account receivable / average daily sales

Average daily sales = 13.75/365 = 0.04

0.03/0.04 = 0.75

4. Total Asset Turnover

Total sales / total assets

13.75/45.16 = 0.30

Leverage Ratios

5. Total Debt to Assets Ratio

Total debt / total assets

14.11/45.16 = 0.31

6. Total Debt to Equity Ratio

Total debt / total shareholders equity

14.11/18.04 = 0.78

Profitability Ratios and Operating Returns

7. Net Profit Margin

Net income / sales

3.41/7.49 = 0.46

8. Return on Assets (ROA)

Net income / total assets

3.41/45.16 = 0.08

9. Return on Equity (ROE)

Net income / book value of equity

3.41/5.30 = 0.64

Valuation Ratios

10. Price-to-Earnings Ratio

Shareholders/ earning per share

113.73/23.09 = 4.92

11. Market Capitalization

Market price of common shares * number of common shares outstanding

5.28*0.71 = 3.75

CP CALCULATIONS:

Liquidity ratios

Current Ratio

Current assets / Current liabilities

1.21/2.29 = 0.53

Net Working Capital

Current assets current liabilities

1.21-2.29 = -1.08

Efficiency and Working Capital Ratios

Accounts Receivable Days

Account receivable / average daily sales

0.81/0.02 = 40.5

Total Asset Turnover

Total sales / total assets

7.77/22.37 = 0.33

Leverage Ratios

Total Debt to Assets Ratio

Total debt / total assets

9.79/22.37 = 0.44

Total Debt to Equity Ratio

Total debt / total shareholders equity

9.79/7.07 = 1.38

Profitability Ratios and Operating Returns

Net Profit Margin

Net income / sales

2.31/7.77 = 0.30

Return on Assets (ROA)

Net income / total assets

2.31/22.37 = 0.10

Return on Equity (ROE)

Net income / book value of equity

2.31/7.84 = 0.29

Valuation Ratios

Price-to-Earnings Ratio

Shareholders/ earning per share

7.07/17.85 = 0.40

Market Capitalization

Market price of common shares * number of common shares outstanding

17.85*0.14 = 2.50

• Briefly discuss each companys financial position, is it good or bad and explain why (based on the income statement and the profitability ratios)?
• Discuss CNI and CP ratios compared to each other. Which company does better in some areas or all areas?
• Based on your analysis, select which company had the best financial performance for 2019 and support your conclusion.