Managerial Finance Assignment #2

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School

Centennial College *

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Course

5515

Subject

Finance

Date

Apr 3, 2024

Type

docx

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3

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Managerial Finance 5550 Winter 2023 Name: Rahul Chandrakant Kalambe Student Number - N01579500 Assignment #2 (5% of your Final Grade) Submission Requirements The entire assignment must be submitted in the Assignments section on Blackboard on this 2-pager. Please print or download this document and fill it in. When you are done, sign it in the right upper corner and submit as .pdf or .jpg, via BB. Emailed and late assignments will not be accepted. Check with your classmates which companies they have chosen for their Assignment. I will not accept two similar assignments . If this is a case, I will give 0 mark to all who submit the same assignment (same two companies). Try to avoid this problem by properly choosing two companies for your assignment. There are thousands of publicly traded companies, so try to choose some unique ones. ------------------------------------------------------------------------------------------------------------------------------------ Exercises: 1. Choose two publicly traded companies that are listed on the Toronto Stock Exchange (TSX ) or New York Stock Exchange (NYSE) . The companies should be competitors and/or within the same industry. Find their Financial Statements for end of year (Dec 31 st ) of 2021 (2022 – is not available yet) and calculate Cash Flow from Assets and the Financial Ratios included in Part B for each company. Complete and submit Part B . In Part B of the Assignment decide on which company is doing better for each ratio. 2. Briefly give your overall impression of each company based on your ratios and choose which one you think would make a better investment option. Explain your answer. (approx. 250 words) Overall impression : In terms of total assets, Loblaw Companies Limited has a significantly larger balance sheet compared to Metro Inc. However, this is not necessarily an indicator of which company is better for investment Looking at the current ratio, Loblaw Companies Limited has a higher ratio, indicating that it has better ability to meet its short-term obligations using its current assets. On the other hand, Metro Inc has a higher debt-to -equity ratio, which may indicate higher financial leverage and risk While comparing the Gross profit margin, Loblaw company Limited have higher gross profit margin then as compared to Metro Inc If we come to Net Profit Margin, Metro Inc is leading higher terms of net profit margin then Loblaw Companies Limited. A high net profit margin means that a company can effectively control its costs and/or provide goods or service at a price significantly higher than its cost. Both Loblaws and Metro Inc. have their strengths and weaknesses. From above comparison we concluded that Metro Inc is resulting in good financial analysis as compared to Loblaw Companies Limited. Hence we find the conclusion that Metro Inc is better option for investment as compared to Loblaw Companies Limited. It's important to note that there are other factors to consider when making an investment decision, such as market trends, management quality, industry conditions, and future growth potential. It's important to conduct further research and analysis on these factors before making an investment decision.
Managerial Finance 5550 Winter 2023 Name: Rahul Chandrakant Kalambe Student Number - N01579500 Part B Assignment #2 Company #1 Company #2 Company Name: Loblaw Companies Limited (L.TO) Metro Inc (MRU.TO) Which Company is performing better? Stock Exchange & Symbol: Toronto Stock Exchange(TSX) Toronto Stock Exchange(TSX) Financial Statements used: Balance Sheet and Income Statement Balance Sheet and Income Statement Cash flow from Assets Cash Flow 36,45,000 8,40,300 Loblaw Companies Limited (L.TO) is performing better Short Term Liquidity Ratios Current Ratio 1.37 1.12 Loblaw Companies Limited (L.TO) is performing better Quick Ratio 0.81 0.59 Loblaw Companies Limited (L.TO) is performing better Cash Ratio 26% 20% Loblaw Companies Limited (L.TO) is performing better Long Term Debt Ratios Total Debt Ratio 68.39% 52.91% Metro Inc (MRU.TO) is performing better Debt / Equity Ratio 0.41 0.66 Loblaw Companies Limited (L.TO) is performing better Times interest earned 4.26 8.60 Metro Inc (MRU.TO) is performing better Asset Utilization Ratios Inventory Turnover 7.05 12.51 Metro Inc (MRU.TO) is performing better Days Sales in Inventory 51.78 days 29.17 days Metro Inc (MRU.TO) is performing better Receivables Turnover 12.11 26.92 Metro Inc (MRU.TO) is performing better Days Sales in Receivables 30.14 days 13.56 days Metro Inc (MRU.TO) is performing better Profitability Ratios Gross Profit Margin 31.47% 19.99% Loblaw Companies Limited (L.TO) is performing
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