Company Analysis

Students will prepare a company analysis of Canadian Tire Corporation (CTC). CTC is a Canadian retailing giant owning Canadian Tire, Sport Check, Marks, Atmosphere, PartSource, Helly Hanen and a number of other smaller retail outlets and chains along with large financial services, gas, and real estate units.

Self-selected teams of two students will prepare reports using the companys annual report and other filings found on its website or through SEDAR. Reports will be 10-pages in length plus any relevant exhibits and should be divided into the following sections:

Executive summary

Business description

SWOT analysis

Liquidity

Asset management

Long-term debt paying ability

Profitability

Market valuation

Recommendations

All the ratios, vertical analysis and horizontal analysis should be done for 10 years that is from 2007 to 2017. An additional instruction is below:

Canadian Tire Corporation

Financial Analysis

Comparative financial statements (income statement, cash flow statement, and balance sheet) should be provided for the last five years along with vertical and horizontal analysis for the income statement and balance sheet. Ratios should be calculated over a 10-year period.

Liquidity

Current ratio (Industry average)

Cash ratio

Quick ratio

Cash to income

Analysis of cash flow statements

Asset Management

Inventory turnover in days (industry average)

Accounts receivable turnover in days

Accounts payable turnover in days

Net working capital turnover

Fixed asset turnover (industry average)

Total asset turnover

Long-term Debt Paying Ability

Times interest earned ratio

Long-term debt to total capitalization ratio (industry average)

Profitability

Gross profit margin (industry average)

Operating profit margin (industry average)

Net profit margin

Cash flow margin

ROA

Cash return on assets

ROE (industry average)

Cash return on equity

3-way analysis of ROE

Growth rate of sales (10-year trend using index numbers)

Growth rate of net income (10-year trend using index numbers)

Segmented reporting (retail, CT REIT, Financial Services)

Sales by segment and percent of total sales

EBT by segment and percent of total sales

Growth rate of sales by segment (10-year trend using index numbers)

Growth rate of EBT by segment (10-year trend using index numbers)

Market Valuation

EPS (Basic and diluted)

Cash flow per share

Dividend payout ratio

Dividend yield

Earnings yield

Price-to-earnings ratio

Price-to-book-value ratio

Notes to the financial statements should also be reviewed carefully.