Financial Management

Agrium Inc has the world’s largest production of crop nutrients, it was founded in 1931 and its headquartered is in Calgary. Agruim is a major supplier of agricultural products and services and has around 11 million product tones each year. Agrium operates in wholesale and retail segments. It has around 1500 retail agricultural centers in the United States, Canada, Australia, And south America. The company used to be known as Cominco Fertilizers Ltd. And it changed to Agrium Inc. as learned from class, the four classification system of financial report Ratios, I will be looking at the A. Profitability Ratios B. Asset Utilization Ratios C. Liquidity Ratios D. Debt Utilization Ratios.

A. Profitability Ratio:

Profit Margin = Net income / sales

315,000,000 / 13,766,000 = 22.88%

Return on assets ROA = Net Income / Total Assets

315,000,000 / 17,942,000 = 17.56%

B. Asset Utilization Ratios:

Receivables Turnover = Sales / Receivables

13,766,000 / 2,406,000 = 5.72 times

Total Asset Turnover = Sales / Total Assets

13,766,000 / 17,942,000 = 0.77 times

C. Liquidity Ratios:

Current Ratio = Current Assets / Current Liabilities

7,440,000 / 6,174,000 = 1.21

Quick Ratio = Current assets – inventory / Current Liabilities

7,440,000 – 3,321,000 / 6,174,000 = 0.67

D. Debt utilization Ratios:

Debt to Total Assets = Total Debt / Total Assets

6,174,000 / 17,942,000 = 34%

Times interest earned = Income before interest and taxes / Interest

705,000,000 / 210,000,000 = 3.36 times

Conclusion: