Problem
Using the financial statements of both The North West Company Inc. and Sobeys Inc., answer the following questions for both companies:
A. Determine the following 2018 and 2019 values for each company as follows:
a. Working capital
b. Current ratio
c. Debt to total assets
B. Assume that the industry average for the current ratio is 1.8 and debt to total assets is 41.1%. Discuss the relative liquidity and solvency of the two companies and their industry.
C. What was the amount of net operating cash flows reported by each company for the years ending in 2019 and 2018?
D. Discuss whether or not each company managed its noncash working capital better or worse in the most recent year compared with the prior year.
E. Take a further look into the statements of cash flows of the two companies. What was the most significant investing activity for each company? Financing activity?
F. What conclusions can you make from your analysis in the above parts?