Should You Invest in Loblaw? Quantitative and Qualitative Analysis

Would You Invest In Loblaw? Explain Your Answer Using Both Quantitative And Qualitative Information. Use Thual Report, The Company Website As Well As Any Other Relevant Information You Can Find To Help You Make Your Decision?

The company Loblaw Limited is a Canadian Company which caters to the retail and the financial sector. The retail sector is catered by the company through a chain of supermarkets and it also houses pharmacy for delivering medicines. Thus the company is catering the healthcare and the retail markets. It also provides services in the financial industry by way of providing credit card services (www.annualreports.com).

The company had provided positive results to the shareholders from the year 2015 to 2017, however the profits for the company had reduced substantially in the year 2018.  The gross margin of the company is at a higher level of 30.6%, however, the net profit margin of the company is low at 2.34%. The current ratio and the quick ratio of the company is at 1.28 and 0.69 respectively, which indicates poor liquidity condition in the company. The debt to equity ratio of the company is at 149.73%, which creates higher risk of uncertainty for the company. The healthcare and the retail sector in Canada have provided negative results highlighting the low performance for the company from this industry. However, the financial sector have been improving in Canada, thus providing opportunities for the business in this sector (investing.com).

However, the major sector or the primary operation of business for the company is in the retail sector which is performing poorly in Canada. Thus this leads to possible future losses for the company from this sector (www.conferenceboard).

Thus the investment in the stock of Loblaw should be avoided since the primary sector for the business of the company is performing relatively poor.

References

(2020). Retrieved 19 January 2020, from http://www.annualreports.com/HostedData/AnnualReports/PDF/TSX_L.t_2018.pdf

Loblaw Companies (L) Financial Summary - Investing.com India. (2020). Retrieved 19 January 2020, from https://in.investing.com/equities/loblaw-companies-ltd-financial-summary

Loblaw Companies Limited - AnnualReports.com. (2020). Retrieved 19 January 2020, from http://www.annualreports.com/Company/loblaw-companies-limited

Toronto’s Financial Services Sector Continues Its Rise on The Global Stage . (2020). Retrieved 19 January 2020, from https://www.conferenceboard.ca/press/newsrelease/2018/12/04/toronto-s-financial-services-sector-continues-its-rise-on-the-global-stage?AspxAutoDetectCookieSupport=1