Loblaw Companies Limited (Loblaw) is a Canadian food retailer that owns 1,000 corporate and franchise supermarkets that operate under 22 regional and market segment banners. Loblaw brands include President's Choice, No Name, Joe Fresh, T&T, Everyday Living, Exact, Seaquest, Azami, and Teddy's Choice. Loblaw is a public company, and its shares are listed on the Toronto stock exchange. Below you will find the 2016 and 2015 consolidated balance sheets (statement of financial position). You will also find some excerpts from its notes section. All amounts are in millions of Canadian dollars. The fiscal year of the Company ends on the Saturday closest to December 31. Any references below to 2015 relate to the fiscal year ended January 2, 2016, and any references below to 2016 relate to the fiscal year ended December 31, 2016. SEE THE FOMULA SHEET ON THE TEXTBOOK EXHIBIT 12.5 FOR FINANCIAL STATEMENT RATIOS. REQUIRED: a) (3 marks) Calculate the following ratios for both 2016 and 2015: a. Current ratio b. Quick ratio b) (3marks) Based on your calculation in a), comment on the liquidity of Loblaw and how/if it has changed between fiscal year 2015 and 2016. c) (3 marks) Cost of goods sold is $33,213 million for 2016 and $32,846 million for 2015. Inventory balance was $4,309 million for 2014. Calculate the followings for both 2016 and 2015: a. Inventory turnover b. Days to sell inventory d) (3 marks) Based on the brief description of Loblaw and your understanding of retail business operations, do you think your calculations in c) are reasonable and why? e) (5 marks) Use the information below from Note 12 Inventories" and answer the following: a. Prepare a journal entry to record the write-down of inventories. Loblaw Companies Limited (Loblaw) is a Canadian food retailer that owns 1,000 corporate and franchise supermarkets that operate under 22 regional and market segment banners. Loblaw brands include President's Choice, No Name, Joe Fresh, T&T, Everyday Living, Exact, Seaquest, Azami, and Teddy's Choice. Loblaw is a public company, and its shares are listed on the Toronto stock exchange. Below you will find the 2016 and 2015 consolidated balance sheets (statement of financial position). You will also find some excerpts from its notes section. All amounts are in millions of Canadian dollars. The fiscal year of the Company ends on the Saturday closest to December 31. Any references below to 2015 relate to the fiscal year ended January 2, 2016, and any references below to 2016 relate to the fiscal year ended December 31, 2016. SEE THE FOMULA SHEET ON THE TEXTBOOK EXHIBIT 12.5 FOR FINANCIAL STATEMENT RATIOS. REQUIRED: a) (3 marks) Calculate the following ratios for both 2016 and 2015: a. Current ratio b. Quick ratio b) (3marks) Based on your calculation in a), comment on the liquidity of Loblaw and how/if it has changed between fiscal year 2015 and 2016. c) (3 marks) Cost of goods sold is $33,213 million for 2016 and $32,846 million for 2015. Inventory balance was $4,309 million for 2014. Calculate the followings for both 2016 and 2015: a. Inventory turnover b. Days to sell inventory d) (3 marks) Based on the brief description of Loblaw and your understanding of retail business operations, do you think your calculations in c) are reasonable and why? e) (5 marks) Use the information below from Note 12 Inventories" and answer the following: a. Prepare a journal entry to record the write-down of inventories
