Financial Distress and Insolvency

Financial Distress and Insolvency

Assignment 2 ( 20%)

Select a Canadian company and, using their most recent audited financial statements perform answer the following questions worth 4 marks each :

1. What is your evaluation of the quality of the financial statements? Please justify your assessment.

2. Which companies are comparable to your selected firm? Why did you select these specific companies as comparators? Using two financial databases, list the companies that are included as comparators ( usually included in formulating the “Industry Average”) and comment on their appropriateness.

3. What financial ratios do you feel are most meaningful to your company and why?

4. Calculate the financial ratios you have selected above using the guidelines provided in the “List of Ratios” or the lecture notes. Calculate these ratios again using two standard financial databases. Explain any differences in the results. Are there any more meaningful ratios you could generate that would give you better insight into the operations of your selected firm?

5. Compare the ratio analysis you have completed in Question 2 on your selected firm to the ratios of the comparators and indicate any insights you may have gained from this comparison.

Please include a copy of your company’s financial statements appended to your answer.

Financial Distress and Insolvency

Assignment 2 ( 20%)

Select a Canadian company and, using their most recent audited financial statements perform answer the following questions worth 4 marks each :

1. What is your evaluation of the quality of the financial statements?