Financial Statement Analysis Report: Husky Energy - Finance 2018

This report presents a financial statement analysis of Husky Energy Inc. for the year 2018. It begins by identifying the company's business operations, which include integrated corridor and offshore activities. The report then proceeds to calculate and interpret various financial ratios, including the equity ratio, working capital turnover, current ratio, quick ratio, interest coverage, average collection period, return on assets, return on sales, and dividend payout ratio. The analysis utilizes data extracted from Husky Energy's annual report and focuses on providing a comprehensive overview of the company's financial performance and position. The report includes the formulas used for each ratio and the calculated values, offering insights into the company's liquidity, solvency, profitability, and efficiency. The report concludes by providing a detailed appendix with all the relevant financial data used in the analysis.

Running head: PERFORM FINANCIAL STATEMENT ANALYSIS USING ACTUAL
FINANCIAL STATEMENTS
Perform Financial Statement Analysis Using Actual Financial Statements
Name of the Student
Name of the University
Author’s Note

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PERFORM FINANCIAL STATEMENT ANALYSIS USING ACTUAL FINANCIAL
STATEMENTS
Table of Contents
Step 2 ......................................................................................................................................... 2
Step 3 ......................................................................................................................................... 3
References and Bibliography ..................................................................................................... 5
Appendix .................................................................................................................................... 6

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PERFORM FINANCIAL STATEMENT ANALYSIS USING ACTUAL FINANCIAL
STATEMENTS
Step 2
Full and Legal Name of the Company: HUSKY ENERGY INC.
Website Address of the Company: https://huskyenergy.com/
Description of Business: HUSKY ENERGY INC. has two types of business activities or
operations; they are Integrated Corridor and Offshore. The business operation of integrated
corridor involves in the production of natural gas, thermal bitumen and other relevant liquids.
These business operations take place in Western Canada, the Lloydminster upgrading and
refining complex that is a 35 per cent working interest along with operation of Husky
Mindstream Limited; and the U.S. Midwest’s refineries of the Lima, Superior and Toledo
(huskyenergy.com, 2019).
After that, the business operations of Offshore consists of operations as well as
explorations in the region of Asia Pacific; primary offshore Indonesia and China and in the
region of Atlantic offshore Newfoundland and Labrador. These are the two major business
operations of the company (huskyenergy.com, 2019).
Period of Audited Annual Report: 1st January 2018 to 31st December 2018
Website Address of All the Documents Consulted in SEDAR:
https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00014974
Name:
Student Number:
Course:
Section:
Term:

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PERFORM FINANCIAL STATEMENT ANALYSIS USING ACTUAL FINANCIAL
STATEMENTS
Step 3
Answer Ratio Generic Formula Define details for your
assigned company
1) Equity ratio Equity Ratio = 0.557
Shareholders' Equity / Total Assets
Shareholders Equity = The
considered account for the
calculation of shareholder’s
equity are common shares,
preferred shares, contributed
surplus, retained earnings,
accumulated other
comprehensive income and
non-controlling interests.
2) Working
Capital
Turnover
Working Capital Turnover =
32.063
Revenue / Working Capital
Working Capital = For the
calculation of working
capital, both total current
assets and total current
liabilities are considered. The
amount of working capital is
obtained by subtracting total
current liabilities from total
current assets.
3) Current ratio Current Ratio = 1.139
Current Assets / Current Liabilities
4) Quick ratio Quick Ratio = 0.868
Quick Assets / Current Liabilities
Quick Assets = The
calculation of quick ratio
needs the consideration of
total current assets,
inventories and prepaid
expenses. The amount of
quick asset is obtained by
subtracting inventories and
prepaid expenses from total
current assets.
5) Inventory
turnover
Inventory Turnover = 0
Cost of Sales / Average Inventory
Since Husky Energy Inc. is an
energy company, the
company does not disclose
their cost of sales. For this
reason, it is not possible to
calculate inventory turnover.
6) Interest
Coverage
Interest Coverage = 6.672
Operating Income / Annual Interest
Expense

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PERFORM FINANCIAL STATEMENT ANALYSIS USING ACTUAL FINANCIAL
STATEMENTS
7) Average
Collection
Period
Average Collection Period =
22.226
(Trade Accounts Receivable /
Revenues) * 365
8) Return on
Assets
Return on Assets = 6.148%
Operating Income / Total Average
Assets
For the calculation of average
total assets, both the values of
opening and closing balance
of total assets are considered.
The value is obtained by
dividing the total of opening
and closing assets by 2.
9) Return on
Sales
Return on Sales = 6.548%
Net Income / Net Sales or Revenue
10) Dividend
Payout Ratio
Dividend Payout Ratio = 0.319
Common Dividends per Share /
Earnings per Share

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PERFORM FINANCIAL STATEMENT ANALYSIS USING ACTUAL FINANCIAL
STATEMENTS
References and Bibliography
Easton, M., & Sommers, Z. (2018). Financial Statement Analysis & Valuation, 5e.
Energy, H. 2019. Overview - Husky Energy. [online] Huskyenergy.com. Available at:
https://huskyenergy.com/about/overview.asp [Accessed 23 Mar. 2019].
Huskyenergy.com. 2019. [online] Available at:
https://huskyenergy.com/downloads/abouthusky/publications/annualreports/HSE_An
nual2018.pdf [Accessed 23 Mar. 2019].
Williams, E. E., & Dobelman, J. A. (2017). Financial statement analysis. World Scientific Book
Chapters, 109-169.

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PERFORM FINANCIAL STATEMENT ANALYSIS USING ACTUAL FINANCIAL
STATEMENTS
Appendix
Particulars Amount (CAD m)
Shareholder's Equity (A) 19,614
Total Assets (B) 35,225
Equity Ratio (A/B) 0.557
Particulars Amount (CAD m)
Revenue (A) 22,252
Current Assets (B) 5,688
Current Liabilities (C) 4,994
Working Capital (D) [B-C] 694
Working Capital Turnover (A/D) 32.063
Particulars Amount (CAD m)
Current Assets (A) 5,688
Current Liabilities (B) 4,994
Current Ratio (A/B) 1.139
Particulars Amount (CAD m)
Current Assets (A) 5,688
Inventories (B) 1,232
Prepaid Expenses (C) 123
Quick Assets (D) [A-(B+C)] 4,333
Current Liabilities (E) 4,994
Quick Ratio (D/E) 0.868
Particulars Amount (CAD m)
Operating Income (A) 2,095
Annual Interest Expenses (B) 314
Interest Coverage (A/B) 6.672
Particulars Amount (CAD m)
Trade Accounts Receivable (A) 1,355
Revenue (B) 22,252
Days (C) 365
Average Collection Period (A/B)*C 22.226

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PERFORM FINANCIAL STATEMENT ANALYSIS USING ACTUAL FINANCIAL
STATEMENTS
Particulars Amount (CAD m)
Operating Income (A) 2,095
Total Average Assets (B) 34076
Return on Assets (A/B) 6.148%
Particulars Amount (CAD m)
Net Income (A) 1,457
Revenue (B) 22,252
Return on Sales (A/B) 6.548%
Particulars Amount
Common Dividend per Share (A) 0.45
Earnings per Share (B) 1.41
Dividend Pay-out Ratio (A/B) 0.319