Loblaws Annual Report Analysis Term Paper Example | Topics and Well Written Essays - 2000 words

Loblaws Annual Report Analysis - destination Paper ExampleSuch misstatements can arise from either an error or fraud. according to the tenders opinion, the consolidated financial statements presented fairly, in all material respects, the consolidated financial position of Loblaw Companies particular(a) as at January 1, 2011 and were in accordance with the Canadian generally accepted accounting principles. 3. Loblaw is Canadas largest food market retailer and has taken several initiatives to ensure it sustains the environment. They practice sustainable seafood and have set up chromatic farms. In order to prevent the detrimental alludes of excessive fishing, Loblaw is committed to sourcing 100% of their sold seafood from sustainable sources by the end of 2013. In addition to this, they have a campaign against the plastic bag consumption in their stores and were successful in reducing 2.5 billion plastic bags since 2007. Moreover, Loblaw gave a gift of $3 million to induce in rese arching sustainable means of food production. They also have initiated solar energy projects in union with Northland Power Inc. to help reduce their carbon footprint. Consequently, they have been awarded accolades and be ranked in top 50 Canadian sustainable companies list. 4. A) According to the matching principle, the company recognizes its revenue at its VIE and corporate stores at the time the sale is made to its customers and also at the time of delivery of its inventory to the associated and franchised stores B) When it comes to fixed assets they are recorded at cost which includes capitalized interest while derogation starts once the asset has been put into use. The depreciation is recognized on a straight-line basis and is depreciated over the estimated useful spirit of the asset which ranges from 20-40 years for buildings, up to 10 years for building improvements and from 3 to 10 years for equipment and fixtures. C) Goodwill at Loblaw is assessed for impairment at a min imum on an annual basis. It is done by comparing the fair value of a reporting unit to its carrying value. A grace impairment charge is recognized to the extent that the carrying value of goodwill exceeds the impaired fair value in operating income. D) The company assesses intangible assets to determine if their useful life is definite and in cases where it is they are amortized over their useful lives up to a maximum of 17 years. The intangible assets with indefinite useful lives are annually assessed for impairment. 5. Loblaw generated a higher profit per dollar of sales in the fiscal year 2010 compared to 2009. This is visible by two ratios namely Gross Profit per sales and operate strand. Operating Margin is calculated by dividing the Net Operating Income for a period with the Sales. The Operating Margin increased in 2010 to 4.1% from 3.9% in 2009. This is primarily attributed to the subsequent increase in gross profit and the impact the acquisition of T & T. Likewise, the Gr oss Profit as a percentage of Sales went up from 23.4% in 2009 to 24.5% in 2010 and was caused by factors such as strong Canadian dollars, improved control label, continued purchase synergies and more disciplined vendor management. 6. The interest coverage ratio measures the interest payment of the company compared to its allowance before Income and Taxes. The greater the Interest coverage ratio the better the chances of the company in paying its debt