Hudson’s Bay Company’s financial statements for its year ended February 3, 2018 (fiscal 2017) can be found at the end of this volume or on the company website. HBC is a global retailer with investments in real estate joint ventures.
Instructions
Review Hudson’s Bay Company’s financial statements and notes and answer the following questions.
a. Prepare a summary analysis of HBC’s sources and uses of cash at the level of operating, investing, and financing subtotals only, for its years ended February 3, 2018 (fiscal 2017) and January 28, 2017 (fiscal 2016). Based on this analysis, comment on the similarities and differences in the company’s needs for cash and how they were met over the past two years. Is the cash generated from operating activities significantly different from net losses in both fiscal 2017 and 2016? Suggest why this might happen.
b. What method of reporting operating cash flows does HBC use in the statement of cash flows? Do you think this approach provides useful information to a potential investor?
c. Under IFRS, HBC has a choice in classifying interest, finance costs, and dividend payments. What choice did HBC make in this respect? Were some borrowing costs capitalized?
d. Calculate the debt to total assets ratio for fiscal 2017 and fiscal 2016. Comment on any trend that you detect and the company’s overall solvency. Compare your analysis with the amount of the cash balance at the end of each year
