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Following the template structure, start by discussing the general findings in trend and cross- section analysis of ratios by category. The paragraph titles will help you organize analysis around the issues that are of interest to investor, i.e., profitability, asset efficiency, liquidity, solvency, and stockholder ratios. For each ratio category, you should separately describe the overall trend of both companies (Rogers and Telus) during the 4-year period, for example, improved, worsened, and relatively stable, etc. In addition, you should summarize cross-sectional comparison between the two companies. An example in the profitability ratio category would be "Company A is overall more/ less profitable than Company B. Finally, it is also necessary to support your summary of cross- sectional comparison with at least one individual ratio in the category. In the last section, you are expected to conduct DuPont and benchmark analysis. In your DuPont analysis, you can emphasize discussions on the most recent year (2018) for all three components (net profit margin percentage, asset turnover and total leverage). Calculations of DuPont formula of both companies are provided in Term Project Part 2 Model. For the purpose of this term project, examples of benchmarks are: Current ratio equal to or greater than 1, Quick Ratio equal to or greater than 0.5, and Times Interest Earned ratio equal to or greater than 5. You are expected to briefly discuss the benchmarks of all three ratios mentioned above. Profitability Ratios: Asset Efficiency Ratios: Short-term Liquidity Ratios: Debt Management (Solvency) Ratios: Stockholder (Market) Ratios: DuPont and Benchmark Analysis: Rogers Communications Inc. Detailed Ratio Calculations 2018 53.47% Gross profit percentage Gross profit = 15.096 - 7.024 = 8,072 Gross profit percentage = 8,072 / 15,096 cito Artumaa 2,059 to ROA & ROE/15,096 cft Ass Tumeses 13.64% Net profit margin percentage 8.26% Return on total assets (ROA) Average total assets = (30,490 - 31.918)/2 = 31,204 ct Aut TO Income tax rate = 758/2,817 = 26.91% Interest expense after tax=(1 - 26.91%) x 709 = 518.22 ROA = (2,059 of fom Net Profit Margin + 518.22)/31,204 = 2.577.22 31,204 albora Average shareholder's equity = (7.496 +8,179)/2 = 7.837.5 ROE = 2,059 cffom Net ProftMargin%/7,837.50 Disclosed in the Consolidated Statements of Income 26.27% Return on equity (ROE) $4.00 Basic earnings per share (EPS) Accounts receivable turnover ratio Average AR = (2,035 +2,259)/2 = 2.147 AR turnover ratio = 15,096 of Gross Profit % / 2.147 15.59 Inventory turnover ratio Accounts payable turnover ratio Average inventory =(435+466)/2 = 450.50 Inventory turnover ratio = 7,024 / 450.50 Credit purchase = 7,024 - 435 +466 = 7,055 Average AP = (2,931 +3,052)/2 = 2.991.50 AP turnover ratio = 7,055/2.991.50 15,096 cffom Net profit margin%/31,204 effomROA 0.48 Asset turnover ratio Current ratio 4,888/6,836 cho Quick ratio 0.72 0.39 0.74 Quick ratio (405 + 0 +2.259/6,836 effom Current ratio = 2.664/6,836 Debt to total 23,739/31,918 asset ratio Times interest |(2,817 + 709) / 709 = 3,526 / 709 earned ratio Price earnings 70.11 efto Dividend yield/4.00 effom Basic EPS ratio Dividend yield 1.92 / 70.11 of fomPE ratio 4.97 17.53 2.74% Telus Corporation Detailed Ratio Calculations 2018 Gross profit percentage 55.68% Gross profit = 14,368 - 6,368 = 8,000 Gross profit percentage = 8,000/ 14,368 efto Artumes 1,624 cito ROA & ROE / 14,368 cft And Tumore 11.30% Net profit margin percentage Return on total assets (ROA) 6.60% Average total assets = (31,053 +33,065)/2 = 32,059 A TO Income tax rate = 552/2,176 = 25.37% Interest expense after tax = (1 - 25.37%) x 659 = 491.83 ROA = (1,624cfiomNet Proft Margin%+491.83) 32,059 = 2.115.83/32,059 aboz Average shareholder's equity = (9,458 +10,341)/2 = 9,899.5 ROE = 1,624 effom Net Proft Marga/9.899.5 16.40% Return on equity (ROE) $2.68 Basic earnings Disclosed in the Consolidated Statement of Income per share (EPS) 8.94 receivable turnover ratio Average AR = (1,614 - 1,600)/2 = 1,607 AR turnover ratio = 14,368 d'fom Gross Prt%/1,607 Inventory turnover ratio Average inventory = (380 +376)/2 = 378 Inventory turnover ratio = 6,368/378 Accounts payable turnover ratio Credit purchase = 6,368 - 380 +376= 6,364 Average A P = (2,460 +2,570)/2 = 2,515 AP turnover ratio = 6,364/2,515 14,368 effom Net profit margins/32,059 effomROA 0.45 Asset turnover ratio Current ratio 3,841/4,841 efto Quick ratio 0.79 Quick (acid test) ratio 0.42 (414 + 0 +1,600) / 4,841 effom Cuneet ratio = 2,014/4,841 22,724 / 33,065 Debt to total asset ratio 0.69 4.30 Times interest (2,176 + 659)/659 = 2,835/659 earned ratio Price/earnings 45.25 fto Dividend yield/2.68 offomBasic EPS 16.88 ratio 2.10 / 45.25 effomPE ratio 4.64% Dividend yield 2018 53.47% 55.68% 13.64% 11.30% 8.26% 6.60% 26.27% 16.40% 4.00 2.68 7.03 8.94 15.59 16.85 ACC 1100 Term Project Part Two Model Rogers vs. Telus Financial Ratios, 2015-2018 Gross profit percentage 2015 2016 2017 Rogers 51.83% 51.85% 52.98% Telus 55.75% 56.00% 55.97% Net profit margin percentage Rogers 10.00% 6.09% 12.84% Telus 11.05% 9.66% 11.77% Return on total assets (ROA) Rogers 6.83% 4.68% 7.91% Telus 6.94% 5.80% 6.65% Return on equity (ROE) Rogers 24.14% 14.01% 26.78% Telus 18.27% 14.80% 17.07% Earnings per share (EPS) Rogers 2.61 1.62 3.58 Telus 2.29 2.06 2.63 Accounts receivable turnover ratio Rogers 7.93 7.34 7.22 Telus 8.59 8.86 8.72 Inventory turnover ratio Rogers 22.71 17.14 15.23 Telus 16.27 16.56 16.87 Accounts payable turnover ratio Rogers 2.45 Telus 2.59 2.49 Asset turnover ratio Rogers 0.48 0.46 Telus 0.46 0.45 Current ratio Rogers 0.52 0.70 0.60 Telus 0.55 0.70 0.77 Quick ratio Rogers 0.37 0.30 Telus 0.39 0.39 0.42 Debt to total assets ratio Rogers 0.81 0.79 0.75 Telus 0.71 0.69 0.70 Times interest earned ratio Rogers 3.39 2.53 4.42 Telus 5.06 4.31 4.74 Price/earnings ratio Rogers 18.52 32.28 17.87 Telus 16.71 20.75 18.11 Dividend yield Rogers 3.97% 3.67% 3.00% Telus 4.39% 4.30% 4.14% 2.36 2.78 25 0.72 0.79 0.36 0.39 0.42 4.97 4.30 17.53 16.88 2.74% 4.64% DuPont Analysis 2018 26.27% 16.40% DuPont Formula: ROE = NPM%ATX Total Leverage 2015 2016 2017 ROE Rogers 24.14% 14.01% 26.78% Telus 18.27% 14.80% 17.07% NPM% Rogers 10.00% 6.09% 12.84% Telus 11.05% 9.66% 11.77% AT Rogers 0.48 0.46 0.48 Telus 0.50 0.46 0.45 Total Leverage Rogers 5.03 5.00 4.35 Telus 3.31 3.22 13.64% 11.30% 0.48 0.45 4.01 3.23 3.33 Comparative Ratio Graphs 2015 - 2018 Gross profit percentage 57.00% 56.00% 55.00% 54.00% 53.00% 52.00% 51.00% 50.00% 49.00% 2015 2016 2017 2018 Telus +-Rogers Net profit margin percentage 15.00% 10.00% Telus +Rogers 5.00% 0.00% 2015 2016 2017 2018 Return on total assets 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2015 2016 2017 2018 Telus +Rogers ACC 1100 Term Project Part Two Model Return on equity 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2015 2016 2017 Telus Rogers 2018 Earnings per share 4.50 3.50 4.00 Telus +Rogers 2.00 1.50 1.00 0.50 0.00 2015 2016 2017 2018 Accounts receivable turnover 10.00 8.00 6.00 4.00 2.00 0.00+ 2015 2016 2017 2018 Telus +Rogers ACC 1100 Term Project Part Two Model Inventory turnover ratio 25.00 20.00 15.00 10.00 5.00 Telus +-Rogers 0.00 2015 2016 2017 2018 Accounts payable turnover ratio ni nini nini nini nini Telus +-Rogers 2.20 2.10 2015 2016 2017 2018 Asset turnover ratio 0.52 0.50 0.48 0.46 0.44 0.42 0.40 Telus +Rogers 2015 2016 2017 2018 ACC 1100 Term Project Part Two Model Current ratio 1.00 0.80 0.60 Telus +Rogers 0.40 0.20 0.00 2015 2016 2017 2018 Quick ratio 0.50 0.40 0.30 Telus Rogers 0.20 0.10 0.00 2015 2016 2017 2018 Debt to total assets ratio 0.85 0.80 0.75 Telus Rogers 0.70 0.65 0.60 2015 2016 2017 2018 ACC 1100 Term Project Part Two Model Times interest earned ratio 6.00 4.00 Telus + Rogers 3.00 2.00 1.00 0.00 2015 2016 2017 2018 Price/earnings ratio 35.00 30.00 25.00 Telus +-Rogers 20.00 15.00 10.00 5.00 0.00 2015 2016 2017 2018 Dividend yield 5.00% 4.00% 3.00% Telus Rogers 2.00% 1.00% 0.00% 2015 2016 2017 2018
