Date: Nov 1, 2015
To: Audit Team
From: Chen Wei, Audit Manager
Subject: Sobeys Inc.
This memo contains a break down of some of the issues that should be considered when auditing the company’s financial statements.
Business Information
Sobeys Inc. is the second largest food retailer in Canada, founded in Nova Scotia. It has stores in al ten provinces and over 1500 supermarkets. When Sobeys was first founded, it was a meat delivery business, but it expanded into a full grocery business in 1924. It was not expanding through Canada, but also involves businesses with the American retailers such as Target.
Risk Assessment
Inherent risk would be considered lower, since there were no material misstatements discovered during the last year’s
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As a retailer and a supplier, Sobeys has an extremely large balance in their inventory account. During 2015, the inventories are more than 50% of the total current assets, and 13% of the total assets. We will compare the inventory accounts of 100 randomly chosen locations out of the 258 locations, as well as the 3 Cash & Carry stores. The company’s main portion of the total inventories would be food related, and they have certain shelf lives. If the unsold inventories are sitting in the warehouse for too long, then the inventory will be unable to sell, and this brings risk to future revenues. So the company should monitor the entire food related inventory, and strictly follow the FIFO rule. We need to compare the average inventory on hand ratio to other competitors in the same industry to find out if the inventory control has serious issues. Also, inquire inventory evaluation at the warehouses and possibly observe a test count done by …show more content…
The sales for the year of 2015 is 6249.2 millions and total assets of 10445 millions, materiality standard should be in the millions. As for misstatements on the financial statement, it could be quite common for companies this size. Therefore, small errors or discrepancies should be accepted and considered material. This would more likely to happen during the examination of the inventories in a warehouse. Our main focus should be on the inventory records, along the financial statements to make sure the company translate all foreign currencies income into Canadian dollars at the end of each reporting period. Also, keep an eye on the deferred revenues and the liabilities that are created by the new loyalty program. Be sure they record all the past and future redemptions correctly and
Loblaw's Shoppers Drug Mart bid escalates grocery war as well as the new competitor Amazon and Walmart. The purpose of the competition is increasing market shares. Loblaw to boost its presence in metropolitan areas and reply to increasing need for smaller stores that provide a wide range of merchandise and are easily accessible in densely populated metropolitan locations. The almost 100-year-old Loblaw chain is great at offering one-stop shopping in large-format stores.
Particulars The Hershey Tootsie Rolls Net sales (A) $ 5,671,009 $ 528,369 Beginning receivable $ 390,061 $ 41,895 Ending receivable $ 410,390 $ 37,394 Average receivable (B) $ 400,226 $ 39,645 Account receivable turnover C = (A/B) 14.17 13.33 Average collection period 365/C 25.76 27.39 As can be seen from the above, the table shows that both The Hershey and Tootsie Rolls companies have very low receivable periods due to the nature of the industry and also reflects the efficient cash management and receivable management on the part of both the companies.
Analyzing Wal-Mart's annual report provides a positive outlook on Wal-Mart's financial health. Given the specific ratios and its comparison to other companies in the same industry, Wal-Mart is leading and more than likely continue its dominance. Though Wal-Mart did not lead in all numbers, its leadership and strong presence of the market cements the ongoing success. The review of the current ratio, quick ratio, inventory turnover ratio, debt ratio, net profit margin ratio, ROI, ROE, and P/E ratio all indicate an upbeat future for the company. The current ratio, which is defined as current assets divided by current liabilities, is a measure of how much liabilities a company has compared to its assets. Wal-Mart in the year of 2007 had a current ratio of .90, and as of January 2008 it had a current ratio of .81. The quick ratio, which is defined as current assets minus inventory divided by current liabilities, is a measure of a company's ability pay short term obligations. Wal-Mart in the year of 2007 had a quick ratio of .25, and as of January 2008 it had a ratio of .21. Both the current ratio and quick ratio are a measure of liquidity. Wal-Mart is not as liquid as its competitors such as Costco or Family Dollar Stores Inc. I believe the reason why Wal-Mart is not too liquid is because they are heavily investing their profits for expansion and growth. Management claims in their financial report that holding their liquid reserves in other currencies have helped Wal-Mart hedge against inflationary pressures of the US dollar. The next ratio to look at is the inventory ratio which is defined as the cost of sales divided by average inventory. In the year of 2007, Wal-Mart’s inventory ratio was 7.68, and as of January 2008 it was 7.96. Wal-Mart has a lot of sales therefore it doesn’t have too much a problem of holding too much inventory. Its competitors have similar ratios though they don’t have as much sales as Wal-Mart. Wal-Mart’s ability to sell at lower prices for same quality, gives them the edge against its competition. As of the year 2007, Wal-Mart had a debt ratio of .58, and as of January 2008, it had a debt ratio of .59. The debt ratio is calculated by dividing the total debt by its total assets. Wal-Mart has a lot more assets than it does debt so Wal-Mart is not overleveraged.
1. Is it proper to multiply the average order size, $42.33, by the number of addresses (1,300,000) in the target mailing?
This chapter discusses when Bryan met Walter McMillian, a hardworking but undereducated man who became romantically and sexually involved with a white woman, named Karen. Interracial relations were illegal all the way up to the mid-1900s, while the law attempted to justify this injustice with “separate but equal” rhetoric. Once the woman’s husband found out, the incident was taken to court where Walter was also present and thus ostracised by the community. The judge for Walter’s case even personally called Bryan and threatened him in hopes he would quit the case, however Bryan was up for the challenge, no matter how hard the judge made it for him. The woman also started using drugs, and started hanging out with a troubled man named Ralph Meyers, and were even suspected to be involved in a murder of a lower class woman named Vickie Pittman.
Sarah Faulkner and Abigail Claesson spent the week of February 13th paging at the Roundhouse in Santa Fe. Working under Representative Dow, Faulkner and Claesson had the opportunity to meet their state’s government officials, experience the dynamic capital, and become intimate with the law making process.
When a case study is conducted, the researcher conducts an in-depth observation on a particular individual for an extended period of time. While observing the individual, the researcher records their observations which are then translated into case materials that are used to demonstrate a possible problem (American Psychological Association, 2009). Also, as mentioned before, case studies are solely focused on observations of a particular individual. However, even though the word individual is usually used to refer to a person, in this case, it can also be used to refer to a business, school, or neighborhood (Cozby & Bates, 2012).
In the retail stores, managers are complaining of frequent stock outs even though the DC is full of merchandise, which is not moving enough through the supplier, DC, and retail stores. The inventory issue also ties in with transportation problems where accurate lead and delivery times are non-existent. The inventory turnover is not at its full potential because if the DC has merchandise yet the stores are stocked out, the inventory is frozen and will become obsolete.
Since the store has 4 years of customer purchases by store, date/time, specific items, and sales prices along with weekly inventory delivery information by store, yogurt mix type, and topping, the first step is to calculate on a store by store basis inventory on hand and inventory turnover in each store. Inventory on hand and inventory turnover are traditional metrics but the company need to focus on managing these metrics in a more dynamic way in order to in order to optimize inventory for each store. Inventory analysis and optimization can use the following metrics:
Walmart Canada Corp., the Canadian division of Walmart, was founded on March 17, 1994 and has more than 395 stores in Canada,
A Serious Cases (SC) – The Serious Case Review Panel supports local safeguarding children boards (LSCBs) with independent advice to ensure that all parties learn from serious child protection incidents. LSCBs will conduct a serious case review (SCR) when a child is seriously harmed or dies as a result of abuse or neglect. The review identifies how local professionals and organisations can improve the way they work together. The Standing Panel will meet as soon as possible following the referral for consideration and always within two weeks.
The increase in cash and cash equivalents reflected strong cash flows from operations during the year, offset by contributions of $308.1 million to the Corporation's pension plans. Prepaid expenses and other current assets reflected higher prepaid pension expense associated with the funding of pension plans during the year and increased original margin balances for commodity futures. The elimination of current deferred income taxes resulted primarily from the significant liability related to the tax effect on other comprehensive income associated with the gains on commodity futures contracts during the year. Property, plant and equipment was lower than the prior year primarily due to depreciation expense of $155.4 million and the retirement of property, plant and equipment of $19.0 million, partially offset by capital additions of $132.7 million. The decrease in goodwill primarily reflected the impact of the sale of certain confectionery brands to Farley's & Sather's and foreign currency translation. The increase in other non-current assets primarily resulted from the pension plan funding during the
- Hypermarkets “Choice and quality for everyone” Sales area ≥ 2500 m2 Offer of food: 3000≤ X ≤ 5000 ref Offer of non food item: 20000≤ X ≤ 35000 ref
Inventory management is a method through which a business handles tangible resources and materials to ensure availability of resources for use. It is a collection of interdisciplinary processes including a full circle of the demand forecasting, supply chain management, inventory control and reverse logistics. Inventory management is the optimization of inventories of manufactured goods, work in progress, and raw materials. According to Doucette (2001) inventory management can be challenging at times; however, the need for effective inventory management is largely seen more as a necessity than a mere trend when customer satisfaction and service have become a prime reason for a business to stand apart from its competition. For example, Wal-Mart’s inventory management is one of the biggest contributors to the success of the company; effective and efficient inventory management is of critical importance.
The defendant is an Airlines Company that had 900 employees. The economic crisis followed with monetary crisis gave bad effects to the defendant. They should decrease the number of their airplanes form 9 to 2 airplanes. They also had to do the efficiency on their employees to 700. On the efficiency process, there was an agreement between the defendant and employees representation on October 30 1998. The agreement stated that they would bring Independent Public Accountant to analyze company financial condition. During the process, all side should work on their duty. The Defendant should pay employees’ wage. The agreement was not guarantee that didn’t mean the dispute process was over, but the negotiation still moved on. During the process, there was another agreement between the defendant and several employees. They agreed the finish the disputed process and the employees would get separation pay. Meanwhile, other employees, who were 153 people didn’t agree with that agreement. Because they didn’t agree each other, so the employees gave the case to the “Panitia Penyelesaian Perselisihan Perburuhan Pusat (P4P)”.