Ratio Analysis

Using the 2019 annual report of the two assigned companies (Linamar Corporation and Magna International Inc.) Calculate the current ratio, quick ratio, net working capital, debt-to equity ratio, times-interest earned, financial leverage, asset turnover, Receivables Turnover, Average collection period, Inventory Turnover, Average days in Inventory, profit margin, return on assets (ROA) and return on equity (ROE). Discuss and interpret the ratios that you calculated and compare the liquidity, efficiency and productivity of PPE and Total assets, receivables and inventory management and solvency of the two companies. Discuss any potential weak performance and risk based on your calculations of the ratios for the two companies. Use the Dupont framework to analyze any difference in the ROE of the two companies. Are there any factors that could be erroneously influencing the results of the ratios you have calculated?

To access the 2019 annual report of Linamar Corporation and Magna International Inc., use the following links:

https://www.linamar.com/investors

https://www.magna.com/company/investors/financial-reports-public-filings/annual-reports