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Times interest earned Introduction

There are $100$ marks available for this assignment. This assignment is worth $10\%$ of your course grade.

For Assignment $1,$ you will be performing some financial statement analyses on a publicly traded company: Telus. You are required to follow the steps outlined

below and produce a report in the form of an executive summary. For the required ratios, you must include the ratios and your calculations, rather than just the

answers. The report should stand on its own, so you must include an Excel spreadsheet where all the calculations are available rather than just the answers,

but only as a reference tool for the text submitted in a pdf document. So you should have $1$ pdf file plus $1$ Excel file for your submission.

See the steps below for mark distribution. Make sure to clearly explain your work so that your Open Learning Faculty Member can give feedback. You may get

partial marks, even if your final answer is incorrect. You will submit $1$ pdf file plus $1$ Excel file for this assignment, please review the Submission Guidelines.

Instructions

Complete the following steps:

Step $1$: Download the $2021$ Annual Report from the company's website. From the Telus homepage, click "About Us$,"$ and then click "Investor

Relations." You will then be able to find the $2021$ Annual Report. Within the Annual Report, locate the Consolidated Financial Statements. Start

looking on page $138.$ Transfer this data to Excel.

Step $2$: Calculate the following ratios for the $2021$ and $2020$ fiscal years. You must clearly show the calculations and should not download pre$-$

calculated ratios from another source. Once your ratios are complete, please copy the ratios from your spreadsheet to your document. Use a basic

copy$/$paste so that you can get feedback on your answers. Do not copy as a picture. $(35$ marks$)$

Current ratio

Quick ratio

Times interest earned

Accounts receivable turnover

Average collection period Times interest earned

Accounts receivable turnover

Average collection period

Asset turnover

Gross profit margin

Net profit margin

Total debt ratio

Return on assets

Return on equity

Step $3$: Perform a three$-$stage DuPont analysis. Once you have calculated the DuPont ratio, provide a written analysis of each section. Tie your

analysis into specific accounts and changes from one year to the next. Note that stating "The ratio increased" is not an analysis. $(15$ marks$)$

Step $4$: Comment on any areas of strength or weakness of the company based on your results of Steps $2$ and $3$ above. Make sure to look not just

at absolute levels, but also at trends over time. Again, be specific. Set up your analysis under the categories of solvency, liquidity, profitability, and

asset management. Within each category, discuss why each ratio improved or worsened. $(30$ marks$)$

Step $5$: Explain whether there would be any difference to your analysis if you were an investor or if you were the CFO. How would the data quality

differ in those two roles? $(20$ marks$)$

Accounts receivable turnover

Average collection period

Asset turnover

Gross profit margin

Net profit margin

Total debt ratio

Return on assets

Return on equity

Step $3$: Perform a three$-$stage DuPont analysis. Once you have calculated the DuPont ratio, provide a written analysis of each section. Tie your

analysis into specific accounts and changes from one year to the next. Note that stating "The ratio increased" is not an analysis. $(15$ marks$)$

Step $4$: Comment on any areas of strength or weakness of the company based on your results of Steps $2$ and $3$ above. Make sure to look not just

at absolute levels, but also at trends over time. Again, be specific. Set up your analysis under the categories of solvency, liquidity, profitability, and

asset management. Within each category, discuss why each ratio improved or worsened. $(30$ marks$)$

Step $5$: Explain whether there would be any difference to your analysis if you were an investor or if you were the CFO. How would the data quality

differ in those two roles? $(20$ marks$)$

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