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Balance Sheet, Income Statement and Financial Ratio Analysis

Review of the income statement and balance sheet and compute the ratios for Caribou Coffee and Fazer Group.

Financial Rations:
Profitability ratios:
Gross profit margin
Net profit margin
Return on stockholders' equity
Liquidity ratios:
Current ratio
Quick ratio
inventory turnover
Leverage ratios:
Debt-to-assets
Debt-to-equity
Times-covered ratio

Balance Sheet:
What components of stockholders' equity do each of the companies disclose?
Do the companies have preferred stock shares outstanding? If so, what special features do these shares contain?
Do any of the companies report treasury shares? If so, do the companies disclose the reason for reacquiring the shares?

Income Statement:
What are the basic and diluted earnings per share for each company?
Have the companies reported any discontinued operations for the last year?
Do the companies disclose any stock compensation plans? If so, are they reporting such plans under the fair value or intrinsic value methods? What was the value of compensation expense measured for any outstanding stock option plans?

What type of information do you find in footnotes to the financial statements?
Do you find the balance sheet, income statement or other measures such as ratios the most informative?
Comment of the advantages and disadvantages of using ratios for analysis.

Attachments

Solution Preview

Financial Ratios (Source: Investopedia, retrieved Oct. 31, 2012 and Fazer and Caribou Annual Reports)
Profitability ratios: Caribou Fazer Formulae
1. Gross profit margin 0.50 0.64 Revenue - ...

Solution Summary

You will find accompanying this a doc file (510046 Financial Reports Caribou and Fazer.docx)
There is an excel file (510046 Financial Reports Caribou and Fazer. Excel worksheet)
The excel file has all calculations.
I referenced the Annual Reports from both Fazer and Caribou for all information.
I researched ratios and definitions from Investopedia.
I summarized each company's financial statements in the excel worksheet.
References are in-text with the Annual Reports.

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