ACCT 621 Individual Assignment Instruction: (please read carefully) Your assignment is the study of real financial reports. You can choose to study Magna International, or Shopify, and their financial...

Analysis of Magna International Inc.
Introduction
Magna International Inc. is a mobility technology company edifice for the automakers in Canada. It is one of the largest manufacturers of automobile parts in North America. It is a reputed company in Canada due to its selling of original equipment parts supplied to companies like Ford Motors, BMW, Toyota, Volkswagen, Tesla and Tata Motors.
The company is headquartered in Aurora located in Ontario. The company was founded by Frank Stronach. It operates with more than 169000 employees as of 2019 and have more than 342 manufacturing facilities and 91 product development units along with its engineering and sales facilities located in 27 nations worldwide. The company’s stock is also traded on the stock exchanges of NYSE and TSX.
Analysis
We will discuss on the quarterly income statement, balance sheet and the financial ratios of Magna International Inc. Further, we have conducted a horizontal analysis for evaluating the income statement and balance sheet of the company on a quarterly basis for FY-2020 and FY-2019.
    MAGNA INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF INCOME (LOSS)
     
    Three months ended
    
    Sep-30
    US dollars in millions
    2020
    2019
    % Change 2020 from 2019
    Sales
    9129
    9319
    -2%
    Cost of expenses
     
     
     
    Cost of goods sold
    7681
    8063
    -5%
    Gross Profit
    1448
    1256
    15%
    Depreciation and amortization
    334
    335
    0%
    Selling, general and administrative
    380
    400
    -5%
    Operating Income
    734
    521
    41%
    Interest expense, net
    26
    18
    44%
    Equity income
    -44
    -37
    19%
    Other expense, net
    316
    859
    -63%
    Income (loss) from operations before income taxes
    436
    319
    37%
    Income taxes
    109
    45
    142%
    Net income (loss)
    327
    -364
    -190%
    Loss income (loss) attributable to Magna International Inc.
    405
    -233
    -274%
    MAGNA INTERNATIONAL INC. CONSOLIDATED BALANCE SHEET
     
    As at September 30, 2020
    As at September 30, 2020
    % Change 2020 from 2019
    ASSETS
     
     
     
    Cu
ent Assets
     
     
     
    Cash and cash equivalents
    1498
    1276
    17%
    Accounts receivable
    6618
    5927
    12%
    Inventories
    3509
    3304
    6%
    Prepaid expenses and others
    196
    238
    -18%
    Income taxes receivables
    69
    -
    0%
     
    11890
    10745
    11%
    Investments
    1143
    1210
    -6%
    Fixed assets, net
    7898
    8260
    -4%
    Operating lease right-of-use assets
    1787
    1811
    -1%
    Intangible assets, net
    462
    484
    -5%
    Goodwill
    2014
    1976
    2%
    Defe
ed tax assets
    319
    308
    4%
    Other assets
    947
    996
    -5%
    Total Assets
    26460
    25790
    3%
    LIABILITIES AND SHAREHOLDERS' EQUITY
     
     
     
    Cu
ent liabilities
     
     
     
    Accounts payable
    5808
    5628
    3%
    Accrued salaries and wages
    851
    753
    13%
    Other accrued liabilities
    2246
    1800
    25%
    Income taxes payable
    -
    17
    0%
    Long-term debt due within one yea
    98
    106
    -8%
    Cu
ent portion of operating lease liabilities
    226
    225
    0%
     
    9229
    8529
    8%
    Long-term debt
    3832
    3062
    25%
    Operating lease liabilities
    1582
    1601
    -1%
    Long-term employee benefit liabilities
    696
    677
    3%
    Other long-term liabilities
    305
    371
    -18%
    Defe
ed tax liabilities
    406
    419
    -3%
    Total Liabilities
    6821
    6130
    11%
    Shareholder's equity
     
     
     
    Capital stock
     
     
     
    Common shares
    3186
    3198
    0%
    Contributed surplus
    130
    127
    2%
    Retained earnings
    8088
    8596
    -6%
    Accumulated other comprehensive loss
    -1198
    -1090
    10%
     
    10206
    10831
    -6%
    Non-controlling interests
    204
    300
    -32%
     
    10410
    11131
    -6%
    Total Liabilities and Shareholder's equity
    26460
    25790
    3%
    Financial Ratios - Quarterly
    2020
    2019
    Solvency Ratios
     
     
    Debt Equity Ratio
    0.67
    0.57
    Proprietary Ratio
    0.39
    0.42
    Liquidity Ratio
     
     
    Cu
ent Ratio
    1.29
    1.26
    Quick Ratio
    0.91
    0.87
    Cash Ratio
    0.16
    0.15
    Profitability Ratio
     
     
    Operating Profit Margin
    0.08
    0.06
    Gross Profit Margin
    0.16
    0.13
    Net Profit Margin
    0.04
    -0.04
    Return on Assets
    0.01
    -0.01
    Return on Equity
    0.03
    -0.03
From the above analysis of the income statement, it can be observed that the Net Income of Magna International Inc. is more in FY-2020 compared to that of FY-2019 by 190%. This is a significant improvement in terms of profitability for the company in the FY-2020.
We will analyse the financial ratios based on the FY-2020 and...