M4-18.
$ millions
2018
2017
Total assets
$97,334
$84,524
Less Total liabilities
13,207
10,177
Equity
$84,127
$74,347
Return on equity (ROE) = Net income / Average Equity
27.91%
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Financial Analysis of Waterloo Brewing Company Limited (WB) for the Years 2018 and 2020, Exercises of Accounting
Financial data for Waterloo Brewing Company Limited (WB) for the years 2018 and 2020, including total assets, total liabilities, equity, return on equity (ROE), return on assets (ROA), financial leverage (FL), profit margin (PM), asset turnover (AT), current ratio, times interest earned, and liabilities-to-Equity ratio. The document also includes computations for net income, revenue, and earnings before interest and tax. The analysis includes comments on the results and conclusions for each section.
Typology: Exercises
2021/2022
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M4-18.
$ millions 2018 2017 Total assets $97,334 $84, Less Total liabilities 13,207 10, Equity $84,127 $74, Return on equity (ROE) = Net income / Average Equity 27.91%
M4-19.
a. $ millions 2018 2017 Total assets $97,334 $84, Less Total liabilities 13,207 10, Equity $84,127 $74, Return on equity (ROE) = Net income / Average Equity 27.91% Return on assets (ROA) = Net income / Average total assets 24.32% Financial leverage (FL) = Average total assets / Average Equity 1. b. $ millions 2018 2017 Net income $22, Revenue 55, Total assets 97,334 84, Profit margin (PM) = Net income / Revenue 39.60% Asset turnover (AT) = Revenue / Average total assets 0.
M4-28.
Computations:
- Ratio
- Current ratio 0.91 0.
- Times interest earned 4.61 5.
- Liabilities-to-Equity 6.99 8.
- Current assets 34,636 29,
- Current liabilities 37,930 33,
- Current ratio = Current assets / Current liabilities 0.91 0.
- Earnings before interest and tax 22,278 27,
- Interest expense, gross 4,833 4,
- Times interest earned 4.61 5.
- Total liabilities 382,308 391,
- Equity 54,710 44,
- Liabilities-to-Equity ratio 6.99 8.
Refer to the 20 20 financial statements of the Waterloo Brewing Company Limited (WB). Use these financial statements to respond to the questions below. These financial statements are available on sedar , the repository of public information for the TSX. To access these statements:
- Go to www.sedar.com
- Select “English,” then “Company Profiles”
- Under public companies, select “W,” then “Waterloo Brewing Co.”
- Select “view”
- Scroll down the list of documents to April 9, 2020
- Select “Audited annual financial statements – English” and answer the security question when prompted. Note: page numbers refer to the page as assigned by WB. Required:
- Calculate the selected ratios, as listed below. Use year-end balances rather than averages in the denominators, for simplicity. Suggest an assessment of results (“comment”) or conclusion for each section, as indicated. Add lines in the solutions template, as needed.
- The Statement of Cash Flows is presented on page “9”. The company generated $13, (in 000’s) from operations in 2020. Looking at the investing and financing activities, what were the major uses of cash? What does this imply about the company’s strategy overall?