Use the information in Exhibit 9.11 to respond to the following questions:

a. What amount of current liabilities did Couche-Tard have on April 27, 2008 and April 26, 2009? What amount of non-current liabilities did it have?

b. How much did Couche-Tard owe in salaries and related benefits on April 27, 2008 and April 26, 2009?

c. What was Couche-Tard’s debt-to-equity ratio on April 27, 2008 and April 26, 2009? Interpret the ratios you calculated.

d. Which liabilities on Couche-Tard’s balance sheet are valued at their present value?

What was Couche-Tard’s interest coverage ratio in 2009?

f. Calculate Couche-Tard’s current and quick ratios on April 27, 2008 and April 26, 2009. What is your assessment of the company’s liquidity? What other factors might you consider in assessing the company’s liquidity?

g. What is Couche-Tard’s cash from operations for 2008 and 2009? Why is cash from operations so different from net earnings?

Alimentation Couche-Tard Inc. (Couche-Tard) is a Canadian convenience store operator with a network of over 2,000 stores:in Canada and more than 3,000 stores in the U.S. Over 3,600 of the total number are company-operated and the rest operate under an affiliate program. The company sells fuel in 65 percent of its company-operated stores. The stores are primarily operated under the Couche-Tard and Mac’s trademarks in Canada and the Circle K trademark in the U.S.
In addition to the North American Couche-Tard network, there are approximately 3,500 Circle K-licensed stores in other parts of the world."
Couche-Tard’s consolidated balance sheets and statements of earnings as well as extracts from the statements of cash flows and notes to the financial statements from its 2009 annual report are provided in Exhibit 9.11.'

Transcribed Image Text:

EXHIBIT 9.11 Alimentation Couche-Tard Inc.: Extracts from the Financial Statements CONSOLIDATED BALANCE SHEETS as at April 26, 2009 and April 27, 2008 (in millions of US dollars (Note 2)) Assets Current assets Cash and cash equivalents Accounts receivable (Note 10) Inventories (Note 11) Prepaid expenses Future income taxes (Note 7) Property and equipment (Note 12) Goodwill (Note 13) Trademarks and licenses Other assets (Note 14) Future income taxes (Note 7) 2009 2008 173.3 216.0 225.4 251.7 400.3 444.5 8.5 8.3 37.0 24.7 844.5 945.2 1,789.4 1,748.3 384.8 402.6 172.0 170.3 60.7 53.3 4.5 0.9 3,255.9 3,320.6 Liabilities Current liabilities Accounts payable and accrued liabilities (Note 15) 758.1 842.7 Income taxes payable (Note 7) 26.3 18.6 Current portion of long-term debt (Note 16) 3.9 1.2 Future income taxes (Note 7) 0.7 789.0 862.5 Long-term debt (Note 16) Deferred credits and other liabilities (Note 17) Future income taxes (Note 7) 745.3 841.0 259.0 253.8 136.6 109.6 1,929.9 2,066.9