What inventory method does Aritzia use?-Does Aritzia have any business interests in foreign countries? Explain your answer.

Assignment Question

Case Information: Aritzia Inc. ONLY USE APA STYLE FOR CITATION IF REQUIRED The objective of this exercise is to develop your ability to perform a comprehensive analysis on a set of financial statements. Use the 2022 annual report of Aritzia Inc. (year ended February 27, 2022) from the website https://investors.aritzia.com . Go to the Financial Reports section and click on Fiscal Year 2022. Part 1: Complete requirement 1 and 2 Part 2: Complete requirement 3, 4 and 5 (Should be on a different document) Part 1 Requirement 1 Provide the following basic information related to Aritzia, including sources as required:
1. Using a site such asSedar.com, Google Finance, or Yahoo Finance, look up retail boutiques. List two competitors of Aritzia.
2. Describe Aritzia’s risks related to business operations.
3. Does Aritzia own any other companies?
4. What is Aritzia’s largest asset? Largest liability?
5. What inventory method does Aritzia use?
6. Does Aritzia have any business interests in foreign countries? Explain your answer.

Requirement 2 Using information you have learned in the text and elsewhere, evaluate Aritzia’s profitability for 2022 compared with 2021. In your analysis, compute the following ratios and then comment on what those ratios indicate. NOTE: You will have to look up the annual report for 2022 and 2021 to compute averages. See www.sedar.comor use Aritzia’s website.
1. Return on sales
2. Asset turnover
3. Return on assets
4. Leverage ratio
5. Return on equity
6. Gross profit percentage
7. Earnings per share (show computation)
8. Book value per share

Part 2 Requirement 3 Evaluate the company’s ability to sell inventory and pay debts during 2022 and 2021. In your analysis, you should compute the following ratios, and then comment on what those ratios indicate. Since the 2022 annual report only includes the balance sheets for 2022 and 2021, you will need to look up the annual report for 2021 for information about 2020 accounts receivable, inventory, and accounts payable.
1. Accounts receivable turnover
2. Inventory turnover 3
. Accounts payable turnover and days’ payable outstanding 4. Cash conversion cycle 5. Current ratio 6. Quick (acid-test) ratio 7. Debt ratio Requirement
4 Evaluate Aritzia’s cash flow.
1. For 2022, is Aritzia’s net cash flow from operations greater than or less than net income? What is the primary cause of the difference?
2. For 2021 and 2022, what is the primary source of cash from investing activities? What is the primary use of cash from investing activities for 2021 and 2022?
3. For 2021 and 2022, what is the primary source of cash from financing activities? What is the primary use of cash from financing activities for 2021 and 2022?
4. What trend(s) do you detect from this analysis?

Requirement 5 Evaluate Aritzia’s shares as an investment.
1. What was the closing market price of Aritzia’s shares on February 28, 2022, the next trading day after the balance-sheet date of February 27, 2022? Google Aritzia’s stock price on Yahoo Finance Aritzia’s ticker symbol is ATZ.TO.
2. Compute the price-earnings ratio using your EPS calculation and the market price you just determined.
3. Based on Management’s Discussion and Analysis (annual report) as well as any business news (Google Finance is an example), would you evaluate the company’s shares as a “buy,” “hold,” or “sell”? State your reasons.