In this assignment, you are going to analyze the financial viability of DOLLARAMA and ARITZIA, currently listed on the TSX. Then you will make an investment decision and justify your reasoning. Email your instructor before the end of Week 2 for approval on the two companies you wish to analyze to ensure they are compatible.

The Process

First, choose two public companies that are listed in the TSX. Please avoid banks, financial institutions and resource companies. Ideally the companies should be in the same industry but they do not have to be.

Second, obtain the most recent annual financial statements for each company. You can get this either from the companies' web sites (usually under "Investor Relations" or from www.sedar.com). Print off the balance sheet and the income statement for each company.

NOTE: At a minimum, you must include a Bibliography that lists your sources. Humber requires you to note these sources in APA style. Refer to the APA Tip Sheet for help with the proper formatting.

Third, calculate the following ratios for each company and briefly describe the results for each section (2-3 sentences for each section):. Groups are free to select other ratios studied in class if certain ratios are not applicable. For example, if the company's selected are in the Service Industry you may not have Inventory or COGS information, as such you should select another ratio to measure Efficiency.

Growth and Profitability

• Year / Year revenue growth
• Year / Year net profit growth
• Gross margin
• Net profit margin
• Return on assets (ROA)
• Return on equity (ROE)

Solvency

• Working capital
• Current ratio
• Quick ratio

Debt

• Total debt ratio
• Times interest earned

Efficiency

• Days sales in inventory
• Days sales in receivables

Finally, Briefly give your overall impression of each company based on your analysis, and choose which one you think would make a better investment option. Explain your answer.