LOBLAW COMPANIES LIMITED
2021 ANNUAL REPORT
Guide to Preparation
Read (at a high level only) the Loblaw Companies Limited 2021 financial statements (pp. 62 thru to 127)
and review the attached ratio information. Make note of any questions you may have. The following
questions may help you focus on some important areas:
1. Who typically uses the financial statements of a company? Managers and decision makers within the
company, potential investors, active investors, debt providers, etc.
2. What are the primary financial statements? What do they tell us about Loblaw? Why do each of the
statements include the word “Consolidated” in the title? What does Loblaw do?
3. Why are “Notes” provided with the financial statements? What kinds of information do they provide?
Review, again at a high level, notes 2, 3 and 4 in particular. What is the purpose of these notes?
4. Consider the key financial ratios for Loblaw. Do they suggest anything to investigate? Any particular
concerns?
5. Take a look at the Balance Sheet. How much of Loblaw’s assets are short term? Long term? Tangible?
Intangible? Also look at Notes 14 and 16 to reflect on this question. What has happened to the
amount of assets invested in Loblaw in 2021?
6. See Note 28 for details of the company’s operating and finance leases. FYI, IFRS 16 adopted in 2019 has
resulted in a significant change to Loblaw’s Balance Sheet (NOT the Income Statement).
7. What is meant by Deferred Income Tax Assets (and Liabilities) on the Balance Sheet (see Note 7)?
8. Note 25 provides detailed disclosure related to Loblaw’s pension plans. What is the difference between
a defined benefit and a defined contribution plan? Has Loblaw’s overfunded or underfunded its plans
(hint: See Summary on bottom of page 105)?
9. How has Loblaw funded their assets? What are their short-term commitments? Long-term?
10. Take a look at the Income Statement. How much disclosure has Loblaw provided on this statement?
How profitable was Loblaw in 2021 compared to the prior year?
11. What is Earnings per Share and why is the Basic number different from the Diluted number? Why are
both of these numbers disclosed? See Note 8 for further information.
12. Take a look at the Statement of Cash Flows. How much cash is generated from the day to day
activities? How does this number compare to the profit disclosed on the Income Statement? Why are
these two numbers different?
13. How much has Loblaw spent on new long-term assets in 2021? In 2020? Are these large amounts?
How can you tell?
14. How has Loblaw paid for their purchases of new long-term assets? How much did Loblaw spend repurchasing shares in 2021? In 2020? Why would they have re-purchased shares?
15. What is the purpose of Note 29? Note 31?
16. What is the purpose of Note 34? Note the calculation of “Adjusted Operating Income”.