a)Please calculate the all ratios of companies -

Profitability ratios(Profit margin, Return on assets ,Return on equity)

Asset utilization ratios (Receivables turnover, Average collection period, Inventory turnover, Fixed asset turnover, Total asset turnover)

Liquidity ratios (Current ratio, Quick ratio) &

Debt utilization ratios (Debt total assets, Times interest earned, Fixed charge coverage)

b) Calculate all your ratios in and Excel File. You need to show all your calculations in excel file but use the calculated value in your main report.

[Note:The answer should be based on "Canadian national railway annual report 2016 and 2017"]
Transcribed Image Text:Selected Railroad Statistics – unaudited 2017 2016 2015 Financial Key financial performance indicators Total revenues ($ millions) 13,041 12,037 12,611 Rail freight revenues (S millions) 12,293 11,326 11,905 Operating income ($ millions) 5,558 5,312 5,266 Net income ($ millions) 5,484 3,640 3,538 Diluted earnings per share ($) Adjusted diluted earnings per share ($) ) Free cash flow ($ millions) ) 7.24 4.67 4.39 4.99 4.59 4.44 2,778 2,520 2,373 Gross property additions ($ millions) 2,703 2,752 2,706 Share repurchases ($ millions) 2,000 2,000 1,750 Dividends per share ($) 1.65 1.50 1.25 Financial position 37,629 20,973 Total assets (S millions) 37,057 36,402 Total liabilities (S millions) 22,216 21,452 Shareholders' equity ($ millions) 16,656 14,841 14,950 Financial ratios Operating ratio (%) 57.4 55.9 58.2 Adjusted debt-to-adjusted EBITDA (times) 1.65 1.75 1.71 Operations (4) Statistical operating data Gross ton miles (GTMS) (millions) 469,200 423,426 442,084 224,710 Revenue ton miles (RTMS) (millions) Carloads (thousands) Route miles (includes Canada and the U.S.) Employees (end of year) Employees (average for the year) 237,098 214,327 5,737 5,205 5,485 19,500 19,600 19,600 23,945 22,249 23,066 23,074 22,322 24,406 Key operating measures Rail freight revenue per RTM (cents) Rail freight revenue per carload ($) GTMS per average number of employees (thousands) Operating expenses per GTM (cents) Labor and fringe benefits expense per GTM (cents) Diesel fuel consumed (US gallons in millions) Average fuel price ($/US gallon) 5.18 5.28 5.30 2,143 2,176 2,170 20,335 18,969 18,114 1.59 1.59 1.66 0.47 0.50 0.54 441.4 398.9 425.0 2.74 2.34 2.68 GTMS per US gallon of fuel consumed 1,063 1,061 1,040 Terminal dwell (hours) 16.2 14.0 15.0 Train velocity (miles per hour) 25.3 27.3 26.3 Safety indicators 9 Injury frequency rate (per 200,000 person hours) Accident rate (per million train miles) 1.83 1.70 1.63 1.83 1.42 2.06 (1) See the section entitled Adjusted performance measures in the MD&A for an explanation of this non-GAAP measure. (2) See the section entitled Liquidity and capital resources - Free cash flow in the MD&A for an explanation of this non-GAAP measure. (3) See the section entitled Liquidity and capital resources - Adjusted debt-to-adjusted EBITDA multiple in the MD&A for an explanation of this non-GAAP measure.
$Financial highlights Change Favorable/(Unfavorable) 2015 2017 vs 2016 2016 vs 2015 In millions, except percentage and per share data 2017 2016 Revenues 13,041 12,037 12,611 8% (5%) Operating income 5,558 5,312 5,266 5% 1% Net income 5,484 %24 3,640 3,538 51% 3% Adjusted net income () 3,778 %24 3,581 %24 3,580 6% Basic earnings per share Adjusted basic earnings per share () Diluted earnings per share Adjusted diluted earnings per share () 7.28 %24 4.69 %24 4.42 55% 6% 5.02 4.61 4.47 9% 3% 7.24 %24 4.67 %24 4.39 55% 6% 4.99 4.59 4.44 9% 3% Dividends declared per share 1.65 1.50 1.25 10% 20% Total assets 37,629 37,057 36,402 2% 2% Total long-term liabilities Operating ratio Free cash flow 16,990 19,208 18,454 12% (4%) 57.4% 55.9% 58.2% (1.5)-pts 2.3-pts 2,778 $ 2,520 $ 2,373 10% 6% (1) See the section of this MD&A entitled Adjusted performance measures for an explanation of this non-GAAP measure. (2) See the section of this MD&A entitled Liquidity and capital resources - Free cash flow for an explanation of this non-GAAP measure. 2017 compared to 2016 Net income for the year ended December 31, 2017 was $5,484 million, an increase of $1,844 million, or 51%, when compared to 2016, and diluted earnings per share increased by 55% to $7.24. The increase was primarily due to a deferred income tax recovery of $1,764 million ($2.33 per diluted share) resulting from the enactment of the U.S. Tax Reform and the impact of higher volumes. Operating income for the year ended December 31, 2017 increased by $246 million, or 5%, to $5,558 million. The increase mainly reflects increased revenues from higher volumes, freight rate increases and higher applicable fuel surcharge rates, partly offset by higher costs from increased volumes and higher fuel prices. The operating ratio, defined as operating expenses as a percentage of revenues, was 57.4% in 2017, compared to 55.9% in 2016. Higher fuel prices had a 0.9-point impact on the increase for the year. Revenues for the year ended December 31, 2017 totaled $13,041 million compared to $12,037 million in 2016. The increase of $1,004 million, or 8%, was mainly attributable to higher volumes of traffic in overseas intermodal, frac sand, coal and petroleum coke exports, and Canadian grain; freight rate increases; and higher applicable fuel surcharge rates; partly offset by the negative translation impact of a stronger Canadian dollar. Operating expenses for the year ended December 31, 2017 amounted to $7,483 million compared to $6,725 million in 2016. The increase of $758 million, or 11%, was mainly due to higher costs from increased volumes and higher fuel prices, partly offset by the positive translation impact of a stronger Canadian dollar.$
Transcribed Image Text:Financial highlights Change Favorable/(Unfavorable) 2015 2017 vs 2016 2016 vs 2015 In millions, except percentage and per share data 2017 2016 Revenues 13,041 12,037 12,611 8% (5%) Operating income 5,558 5,312 5,266 5% 1% Net income 5,484 %24 3,640 3,538 51% 3% Adjusted net income () 3,778 %24 3,581 %24 3,580 6% Basic earnings per share Adjusted basic earnings per share () Diluted earnings per share Adjusted diluted earnings per share () 7.28 %24 4.69 %24 4.42 55% 6% 5.02 4.61 4.47 9% 3% 7.24 %24 4.67 %24 4.39 55% 6% 4.99 4.59 4.44 9% 3% Dividends declared per share 1.65 1.50 1.25 10% 20% Total assets 37,629 37,057 36,402 2% 2% Total long-term liabilities Operating ratio Free cash flow 16,990 19,208 18,454 12% (4%) 57.4% 55.9% 58.2% (1.5)-pts 2.3-pts 2,778 $ 2,520 $ 2,373 10% 6% (1) See the section of this MD&A entitled Adjusted performance measures for an explanation of this non-GAAP measure. (2) See the section of this MD&A entitled Liquidity and capital resources - Free cash flow for an explanation of this non-GAAP measure. 2017 compared to 2016 Net income for the year ended December 31, 2017 was $5,484 million, an increase of $1,844 million, or 51%, when compared to 2016, and diluted earnings per share increased by 55% to $7.24. The increase was primarily due to a deferred income tax recovery of $1,764 million ($2.33 per diluted share) resulting from the enactment of the U.S. Tax Reform and the impact of higher volumes. Operating income for the year ended December 31, 2017 increased by $246 million, or 5%, to $5,558 million. The increase mainly reflects increased revenues from higher volumes, freight rate increases and higher applicable fuel surcharge rates, partly offset by higher costs from increased volumes and higher fuel prices. The operating ratio, defined as operating expenses as a percentage of revenues, was 57.4% in 2017, compared to 55.9% in 2016. Higher fuel prices had a 0.9-point impact on the increase for the year. Revenues for the year ended December 31, 2017 totaled $13,041 million compared to $12,037 million in 2016. The increase of $1,004 million, or 8%, was mainly attributable to higher volumes of traffic in overseas intermodal, frac sand, coal and petroleum coke exports, and Canadian grain; freight rate increases; and higher applicable fuel surcharge rates; partly offset by the negative translation impact of a stronger Canadian dollar. Operating expenses for the year ended December 31, 2017 amounted to $7,483 million compared to $6,725 million in 2016. The increase of $758 million, or 11%, was mainly due to higher costs from increased volumes and higher fuel prices, partly offset by the positive translation impact of a stronger Canadian dollar.

Question

a)Please calculate the all ratios of companies -

Profitability ratios(Profit margin, Return on assets ,Return on equity)

Asset utilization ratios (Receivables turnover, Average collection period, Inventory turnover, Fixed asset turnover, Total asset turnover)

Liquidity ratios (Current ratio, Quick ratio) &

Debt utilization ratios (Debt total assets, Times interest earned, Fixed charge coverage)

b) Calculate all your ratios in and Excel File. You need to show all your calculations in excel file but use the calculated value in your main report.

[Note:The answer should be based on "Canadian national railway annual report 2016 and 2017"]

Selected Railroad Statistics – unaudited
2017
2016
2015
Financial
Key financial performance indicators
Total revenues ($ millions)
13,041
12,037
12,611
Rail freight revenues (S millions)
12,293
11,326
11,905
Operating income ($ millions)
5,558
5,312
5,266
Net income ($ millions)
5,484
3,640
3,538
Diluted earnings per share ($)
Adjusted diluted earnings per share ($) )
Free cash flow ($ millions) )
7.24
4.67
4.39
4.99
4.59
4.44
2,778
2,520
2,373
Gross property additions ($ millions)
2,703
2,752
2,706
Share repurchases ($ millions)
2,000
2,000
1,750
Dividends per share ($)
1.65
1.50
1.25
Financial position
37,629
20,973
Total assets (S millions)
37,057
36,402
Total liabilities (S millions)
22,216
21,452
Shareholders' equity ($ millions)
16,656
14,841
14,950
Financial ratios
Operating ratio (%)
57.4
55.9
58.2
Adjusted debt-to-adjusted EBITDA (times)
1.65
1.75
1.71
Operations (4)
Statistical operating data
Gross ton miles (GTMS) (millions)
469,200
423,426
442,084
224,710
Revenue ton miles (RTMS) (millions)
Carloads (thousands)
Route miles (includes Canada and the U.S.)
Employees (end of year)
Employees (average for the year)
237,098
214,327
5,737
5,205
5,485
19,500
19,600
19,600
23,945
22,249
23,066
23,074
22,322
24,406
Key operating measures
Rail freight revenue per RTM (cents)
Rail freight revenue per carload ($)
GTMS per average number of employees (thousands)
Operating expenses per GTM (cents)
Labor and fringe benefits expense per GTM (cents)
Diesel fuel consumed (US gallons in millions)
Average fuel price ($/US gallon)
5.18
5.28
5.30
2,143
2,176
2,170
20,335
18,969
18,114
1.59
1.59
1.66
0.47
0.50
0.54
441.4
398.9
425.0
2.74
2.34
2.68
GTMS per US gallon of fuel consumed
1,063
1,061
1,040
Terminal dwell (hours)
16.2
14.0
15.0
Train velocity (miles per hour)
25.3
27.3
26.3
Safety indicators 9
Injury frequency rate (per 200,000 person hours)
Accident rate (per million train miles)
1.83
1.70
1.63
1.83
1.42
2.06
(1) See the section entitled Adjusted performance measures in the MD&A for an explanation of this non-GAAP measure.
(2) See the section entitled Liquidity and capital resources - Free cash flow in the MD&A for an explanation of this non-GAAP measure.
(3) See the section entitled Liquidity and capital resources - Adjusted debt-to-adjusted EBITDA multiple in the MD&A for an explanation of this non-GAAP measure.

Financial highlights
Change
Favorable/(Unfavorable)
2015 2017 vs 2016 2016 vs 2015
In millions, except percentage and per share data
2017
2016
Revenues
13,041
12,037
12,611
8%
(5%)
Operating income
5,558
5,312
5,266
5%
1%
Net income
5,484
%24
3,640
3,538
51%
3%
Adjusted net income ()
3,778
%24
3,581
%24
3,580
6%
Basic earnings per share
Adjusted basic earnings per share ()
Diluted earnings per share
Adjusted diluted earnings per share ()
7.28
%24
4.69
%24
4.42
55%
6%
5.02
4.61
4.47
9%
3%
7.24
%24
4.67
%24
4.39
55%
6%
4.99
4.59
4.44
9%
3%
Dividends declared per share
1.65
1.50
1.25
10%
20%
Total assets
37,629
37,057
36,402
2%
2%
Total long-term liabilities
Operating ratio
Free cash flow
16,990
19,208
18,454
12%
(4%)
57.4%
55.9%
58.2%
(1.5)-pts
2.3-pts
2,778 $
2,520 $
2,373
10%
6%
(1) See the section of this MD&A entitled Adjusted performance measures for an explanation of this non-GAAP measure.
(2) See the section of this MD&A entitled Liquidity and capital resources - Free cash flow for an explanation of this non-GAAP measure.
2017 compared to 2016
Net income for the year ended December 31, 2017 was $5,484 million, an increase of $1,844 million, or 51%, when compared to 2016, and
diluted earnings per share increased by 55% to $7.24. The increase was primarily due to a deferred income tax recovery of $1,764 million
($2.33 per diluted share) resulting from the enactment of the U.S. Tax Reform and the impact of higher volumes.
Operating income for the year ended December 31, 2017 increased by $246 million, or 5%, to $5,558 million. The increase mainly
reflects increased revenues from higher volumes, freight rate increases and higher applicable fuel surcharge rates, partly offset by higher
costs from increased volumes and higher fuel prices. The operating ratio, defined as operating expenses as a percentage of revenues, was
57.4% in 2017, compared to 55.9% in 2016. Higher fuel prices had a 0.9-point impact on the increase for the year.
Revenues for the year ended December 31, 2017 totaled $13,041 million compared to $12,037 million in 2016. The increase of $1,004
million, or 8%, was mainly attributable to higher volumes of traffic in overseas intermodal, frac sand, coal and petroleum coke exports, and
Canadian grain; freight rate increases; and higher applicable fuel surcharge rates; partly offset by the negative translation impact of a
stronger Canadian dollar.
Operating expenses for the year ended December 31, 2017 amounted to $7,483 million compared to $6,725 million in 2016. The
increase of $758 million, or 11%, was mainly due to higher costs from increased volumes and higher fuel prices, partly offset by the positive
translation impact of a stronger Canadian dollar.

Accepted Answer

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