In this assignment, you will be performing some financial statement analyses on a publicly traded company: Telus. You are required to follow the steps outlined below and produce a report in the form of an executive summary, which should be no more than two pages long. The written report should stand on its own.  For the required ratios, you must include the ratios and your calculations, rather than just the answers.  

Step 1: Download the 2019 Annual Report from the company’s website. Since some companies issue financials in both Canadian and US dollars following different accounting rules (e.g., IFRS vs. US-GAAP), make sure to download the statements using Canadian dollars. Transfer the company’s consolidated balance sheets and consolidated statements of operations (i.e., income statement) into an Excel workbook.

I encourage you to do this on your own.  For students with very old versions of MS Office, I have included an Excel file that contains the Telus 2019 financials.  This is under the Resources tab.

Step 2: Calculate the following ratios for the past 2 fiscal years. You must clearly show the calculations and should not download pre-calculated ratios from another source.  I included an example for the current ratio in the Excel spreadsheet referenced above that you can follow for the other ratios.  Once your ratios are complete, please copy the ratios from your spreadsheet to your Word document.  Use a basic copy/paste so that you can get feedback on your answers.  Do not copy as a picture.

1. Current ratio
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3. Quick ratio
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5. Inventory turnover
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7. Days of inventory on hand
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9. Accounts receivable turnover
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11. Average collection period
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13. Asset turnover
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15. Gross profit margin
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17. Net profit margin
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19. Total debt ratio
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21. Return on assets
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23. Return on equity
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25. Interest coverage ratio

Step 3: Perform a 3-stage DuPont analysis. Note that this needs appropriate analysis, not just a calculation. 

Step 4: Comment on any areas of strength or weakness of the company, based on your results of Steps 2 and 3 above. Make sure to look, not just at absolute levels, but also at trends over time insolvency, liquidity, profitability, and asset management ratios

Step 5: Compare your results with the management discussion and analysis in the annual report. Examine any differences between their comments and your analysis. You will be assessed on the correct use of financial statement analysis tools from the course material, providing thoughtful analysis that draws on the theories discussed in the course as well as links to what is happening with Telus in the current market.

Step 6: Explain whether there would be any difference to your analysis if you were an investor or if you were the CFO. How would the data quality differ in those two roles?