Consider the following simplified balance sheet and income statement from Canadian Tires 2015 Annual Report to Shareholders.

Balance Sheet (C$ in millions)				Income Statement 2015
	2015	2014		(C$ in millions)
Cash	900.6	662.1
Short-term investments	96.1	289.1		Revenue	12,279.6
Accounts receivable	5,790.5	5,785.7		COGS	8,144.3
Inventory	1,905.1	1,773.3		S&A Expense	2,625.4
Total Current Assets	8,692.3	8,510.2		Depreciation	415.8
Fixed Assets	6,295.5	6,043.0		EBIT	1094.1
Total Assets	14,987.8	14,553.2		Interest	92.8
				Income b Taxes	1,001.3
Accounts payable	3,053.9	3,132.2		Taxes	265.4
Notes payable	829.9	1,446.6		Net Income	735.9
Total Current Liabilities	3,883.8	4,578.8		Dividends	639.0
Long-term debt	5,314.3	4,343.6		Add Retained Earnings	96.9
Total Liabilities	9,198.1	8,922.4
Owners Equity	1,617.7	1,555.7
Retained Earnings	4,172.0	4,075.1
Total Liabilities & Equity	14,987.8	14,553.2

Generate the 2015 cash-flow statement for Canadian Tire. (12 marks)

Calculate cash-flow from assets, cash-flow to debtholders, and cash-flow to equityholders. Does the cash-flow identity hold? (7 marks)

Calculate the following financial ratios for Canadian Tire. (1 mark each)

Current Ratio

Quick Ratio

ROA

ROE

Total Debt Ratio

Long-Term Debt Ratio

Gross Profit Margin

Profit Margin

Times Interest Earned

If Canadian Tire takes out more long-term debt in 2016, what will happen to the long-term debt ratio? Explain! (2 marks)

If Canadian Tire pays its suppliers more timely in 2016, what will happen to its current ratio? Explain! (2 marks)

If, in 2016, Canadian Tire implements a new inventory management system, which reduces the time goods stay in inventory, what will happen to its quick ratio? Explain! (2 marks