Loblaws

The year 2020

Profitability ratios:

Profit margins = (net income)/sales = 1108/51859=2.1%

Gross profit margin = (gross profit)/sales= 15300/51859=29.5%

ROA=(Net income)/(total assest)= 1108/35870=3%

ROE=(Net income)/equity = (Net income)/equity= 1108/10988=10%

Equity multiplier=(total assest)/equity=35870/10988=3.2x

Asset utilization ratio:

Receivable turnover = Sales/(Account recievables)= 51859/4095=12.6%

Average collection period = AR/(Average daily credit sales)=4095/(51859/365)=28 days

Inventory turnover =(Cost of good sold)/Inventory=37234/5195=7.1x

Inventory holding period=Inventory/(Average daily COGS)=5195/(37234/365)=50 days

Accounts payable turnover = COGS/(Account payable)= 37234/5369=6 days

Account payable period = (Account payable)/(Avarage daily purchase)= 5369/(37234/365)=52 days

Capital asset turnover=Sales/capital asset= 51859/12747=4.0x

Total asst turn over=Sales/total asset=51859/35870=1.4x

Liquidity ratios:

Current ratio=(current assets)/(current liabilities)= 11551/8759=1.3x

Quick ratio= (current assets-inventory)/(current liabilities)=(11551-5195)/8759= 0.7x

Debt utilization ratios:

Debt to total asset=(total debt)/(total asset)=16608/35870=46.3%

TIE=EBIT/Interest=2500/740=3.38x

Debt/Equity=debt/(total asset-debt)=16608/(35870-16608)=86.2%

The year 2019:

Profitability ratios:

Profit margins = (net income)/sales = 1081/47099=2.2%

Gross profit margin = (gross profit)/sales= 13988/47099=29.6%

ROA=(Net income)/(total assest)= 1081/36309=2.9%

ROE=(Net income)/equity = (Net income)/equity= 1081/11234=9.6%

Equity multiplier=(total assest)/equity=36309/11234=3.2x

Asset utilization ratio:

Receivable turnover = Sales/(Account recievables)= 47099/4808=9.7%

Average collection period = AR/(Average daily credit sales)=4808/(47099/365)=37 days

Inventory turnover =(Cost of good sold)/Inventory=33789/5076=6.6x

Inventory holding period=Inventory/(Average daily COGS)=5076/(33789/365)=54 days

Accounts payable turnover = COGS/(Account payable)= 33789/5129=6 days

Account payable period = (Account payable)/(Avarage daily purchase)= 5129/(33789/365)=55 days

Capital asset turnover=Sales/capital asset= 47099/12852=3.6x

Total asst turn over=Sales/total asset=47099/36309=1.3x

Liquidity ratios:

Current ratio=(current assets)/(current liabilities)= 11310/9227=1.2x

Quick ratio= (current assets-inventory)/(current liabilities)=(11310-5076)/9227= 0.67x

Debt utilization ratios:

Debt to total asset=(total debt)/(total asset)=16951/36309=46.6%

TIE=EBIT/Interest=2327/755=3.08x

Debt/Equity=debt/(total asset-debt)=16951/(36309-16951)=87.5%

The year 2018:

Profitability ratios:

Profit margins = (net income)/sales = 766/45836=1.6%

Gross profit margin = (gross profit)/sales= 13459/45836=29.3%

ROA=(Net income)/(total assest)= 766/30151=2.5%

ROE=(Net income)/equity = (Net income)/equity= 766/12119=6.3%

Equity multiplier=(total assest)/equity=30151/12119=2.4x

Asset utilization ratio:

Receivable turnover = Sales/(Account recievables)= 45836/4527=10.1%

Average collection period = AR/(Average daily credit sales)=4527/(45836/365) days

Inventory turnover =(Cost of good sold)/Inventory=32537/4803=6.7x

Inventory holding period=Inventory/(Average daily COGS)=4803/(32537/365)=53 days

Accounts payable turnover = COGS/(Account payable)= 32537/5098=6 days

Account payable period = (Account payable)/(Avarage daily purchase)= 5098/(32537/365)=57 days

Capital asset turnover=Sales/capital asset= 45836/5931=7.7x

Total asst turn over=Sales/total asset=45836/30151=1.5x

Liquidity ratios:

Current ratio=(current assets)/(current liabilities)= 11637/8704=1.3x

Quick ratio= (current assets-inventory)/(current liabilities)=(11637-4803)/8704= 0.78x

Debt utilization ratios:

Debt to total asset=(total debt)/(total asset)=8997/30151=29.8%

TIE=EBIT/Interest=1994/397=5.02x

Debt/Equity=debt/(total asset-debt)=8997/(30151-8997)=42.5%

The year 2017:

Profitability ratios:

Profit margins = (net income)/sales = 1517/45867=3.3%

Gross profit margin = (gross profit)/sales= 13053/45867=28.4%

ROA=(Net income)/(total assest)= 1517/35147=4.3%

ROE=(Net income)/equity = (Net income)/equity= 1517/13094=11.6%

Equity multiplier=(total assest)/equity=35147/13094=2.6x

Asset utilization ratio:

Receivable turnover = Sales/(Account recievables)= 45867/4314=10.6%

Average collection period = AR/(Average daily credit sales)=4314/(45867/365)=34 days

Inventory turnover =(Cost of good sold)/Inventory=32913/4438=7.4x

Inventory holding period=Inventory/(Average daily COGS)=4438/(32913/365)=49 days

Accounts payable turnover = COGS/(Account payable)= 32913/5211=6 days

Account payable period = (Account payable)/(Avarage daily purchase)= 5211/(32913/365)=57 days

Capital asset turnover=Sales/capital asset= 45867/10699=4.2x

Total asst turn over=Sales/total asset=45867/35147=1.3x

Liquidity ratios:

Current ratio=(current assets)/(current liabilities)= 11327/8641=1.31x

Quick ratio= (current assets-inventory)/(current liabilities)=(11327-4438)/8641= 0.79x

Debt utilization ratios:

Debt to total asset=(total debt)/(total asset)=11927/35147=33.9%

TIE=NA no ebit for this year

Debt/Equity=debt/(total asset-debt)=11927/(35147-11927)=51.3%

The year 2016

Profitability ratios:

Profit margins = (net income)/sales = 983/46385=2.1%

Gross profit margin = (gross profit)/sales= 12411/46385=26.7%

ROA=(Net income)/(total assest)= 983/34436=2.8%

ROE=(Net income)/equity = (Net income)/equity= 983/13002=7.5%

Equity multiplier=(total assest)/equity=34436/13002=2.6x

Asset utilization ratio:

Receivable turnover = Sales/(Account recievables)= 34436/4048=8.5%

Average collection period = AR/(Average daily credit sales)=4048/(34436/365)=42 days

Inventory turnover =(Cost of good sold)/Inventory=33974/4371=7.7x

Inventory holding period=Inventory/(Average daily COGS)=4371/(33974/365)=46 days

Accounts payable turnover = COGS/(Account payable)= 33974/4806=7 days

Account payable period = (Account payable)/(Avarage daily purchase)= 4806/(33974/365)=51 days

Capital asset turnover=Sales/capital asset= 46385/10599=4.37x

Total asst turn over=Sales/total asset=46385/34436=1.36x

Liquidity ratios:

Current ratio=(current assets)/(current liabilities)= 10204/6942=1.47x

Quick ratio= (current assets-inventory)/(current liabilities)=(10204-4371)/6942= 0.84x

Debt utilization ratios:

Debt to total asset=(total debt)/(total asset)=11650/34436=33.8%

TIE=EBIT/Interest=2358/503=4.68x

Debt/Equity=debt/(total asset-debt)=11650/(34436-11650)=51.1%

Part I: Analyze the financial strength and trends of the company, and comment on the relative performance.

Write a 1.5-page summary which should include;

Comments on the trends for company with respect to profitability, asset utilization, liquidity and leverage.

Comments on the relative performance of the company.

company:

Loblaws