http://www.shaw.ca/en-ca/InvestorRelations/FinancialReports/QuarterlyReports/Fiscal2010QuarterlyReports.htm
Summary
Shaw Communications released its quarterly reports of the period, up to November 2009. The format that Shaw used is a multi-step income statement and classified balance sheet. The income statement presented the service revenue, which is $905,934, increased by more than 10% compared to previous accounting period. The operating, general and administrative expenses are total of $430,982, decreased by about 4%. The total net income (after taxes expenses) of the quarter period is $114,229. Current assets, Cash, which is found in the balance sheet increased greatly compare to previous period, totaled to be $451,288. The total of Shareholders’ equity increased to $9,888,349.
Connections
In this chapter, we learned the format of a multi-step income statement and a classified balance sheet. The first section presents income from operations. The most distinguished section of a multi-step income statement is from the first section, which is the calculation of gross profit, or gross margin. Shaw communications have service revenue and operating, general and administrative expenses in its first section. There is no calculation of gross profit because Shaw mainly receives its profit from providing service to its customers. Shaw does not name the total gross profit. This shows that each company has its own format for its financial statements because of the different system of operation. Shaw is traded on the Toronto and New York stock exchanges. The interest expense and income are part of the operating activities. It is under the operating income section. The second section of the income statement is income from non-operating sources. Shaw’s second section shows the income for tax expense. Like the example in the textbook, the net income is calculated after tax expense/income, and comprehensive income is presented at the end.
Reflections
Shaw provides daily needs for people, for example, internet, TV, telephone connections. The financial statements from Shaw show it has a quite stable performance. Comparing a few more financial statements from previous periods, the net income and service operating income are stable. I think Shaw communications is good for long term investments because of the overall stable performance. Shaw provides services that people daily uses, so its market is very steady. Another reason is that Shaw already provides plans that attract people to use its services. For example, cheaper price to have both the internet and TV plans. I believe there are going to be more variety of plans in the future to attract more customers.
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After reading the Shaw’s annual report, I agree that it is a great company for long term investment. The future plans and the data it provide in the report are seems realistic and reliable, so that actually convince people to invest in their company. In addition, as Vanessa mentioned, when we compare the financial statements, we can clearly tell that the performance of this company is very stable. Even though there is a decrease in the net income, I can see their earning will increase with the new implements. Beside, the return on equity of this company is around 4.4 % which is not the best, but reasonable. Hoping as we get out of recession, it will do a do better.
ReplyDeleteRonald Chan
By providing an annual report, it gives the investors and prospective investors an overglance and an updated report as to how the company is doing and will be doing in the prospective year(s). Shaw provides this information efficiently and clearly on their annual report. It convinces people that they are a good company to invest in because like Ronald had said above, the information acquired are logical and reliable. With the stable performance of Shaw, which is obtained by looking at their financial statements. As Canada is coming out of the recession, I'm sure that Shaw, along with many other similiar companies will do better and better.
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