Comparison of Canadian Pacific Railway and Canadian National Railway

3439 Words Mar 24th, 2013 14 Pages
Table of Contents
1. Introduction
• Background – History and Overview of Industry
• History and Overview of Canadian Pacific Railway
• History and Overview of Canadian National Railway

2. GAAP methods validation 3. Financial Analysis
• Canadian Pacific Railway
• Canadian National Railway

4. Comparison of Canadian Pacific Railway and Canadian National Railway through Ratio Analysis
• Gross margin
• Net income margin,
• Return on assets
• Return on equity
• P/E Ratio

5. Recommendation
6. Appendices
• Income statements
• Balance sheet
• Cash flow Statement
1. Introduction
A. Railway Industry in North America
Rail industry is profitable and growing industry. In North America, five companies are dominant and
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The company was privatized by government in 1995 and after that it acquired Illinois Central Railroad and Wisconsin Central Transportation. CNR is freight railway mainly but it was in passenger service business until 1978.
It transports various goods across the Canada, US and between US-Canada border like-petroleum and chemicals, metals and minerals, forest products, coal, grains and fertilizers, intermodal commodity, the automotive commodity.CNR crosses the continent connecting ports on the Atlantic, Pacific and Gulf coasts and links customers to all three NAFTA nations.
Following are subsidiaries of CNR—
1. Grand Trunk Corporation
2. Grand Trunk Western Railroad Company (“GTW”)
3. Illinois Central Corporation (“IC”)
4. Illinois Central Railroad Company (“ICRR”)
5. Wisconsin Central Transportation Corporation (“WC”)
6. Wisconsin Central Ltd

2. GAAP Methods Validation
A. Canadian Pacific Railway
PricewaterhouseCoopers LLP were the sole external auditors of CPR since Canadian Pacific Railway Limited was incorporated in 2001.In Nov 2010, the board committee with board’s approval decided to go through competitive bidding process to select auditing firm. PricewaterhouseCoopers LLP and Deloitte & Touche LLP were invited for bidding and after evaluation by audit and management committee recommended appointment of Deloitte & Touche LLP as their new auditors. The
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