canadian tire audit report
Client risk profile
Canadian Tire Corporation, Limited (CTC) is primarily a canadian retailer, focusing on automotive and general merchandise. Founded in 1922, the company has been around for almost a century, building strong brand recognition in Canada. Initially starting as a car parts retailer they have expanded rapidly into other areas, mainly general merchandise retail. They have other secondary divisions being; Partsource Automotive stores (strictly automotive parts), Financial Services, Mark’s Work Wearhouse (clothing retailer), FGL Sports Ltd. (various sporting good retail chains), and Canadian Tire Petroleum (gas stations and car washing). The main users of CTC’s financial statements have been identified as the debt holders and shareholders.
Industry
There are many external factors affecting Canadian Tire Corporation (CITE: EXHIBIT 1). As the largest business divisions, the major external forces impacting the Retail and Financial Services divisions are listed below.
Economic Forces Canadian unemployment is a good indicator of consumers’ willingness to spend. Currently unemployment is trending upwards (CITE: EXHIBIT 3). This is poor for the retail industry as consumer spending will decrease as unemployment increases. It impacts all of CTC’s divisions.
Volatile Petroleum Costs Crude oil prices have been extremely volatile lately (CITE FIGURE Z). This has an impact on the supply chain of retailers, as transportation costs will increase with increased fuel costs. This also heavily impacts the Petroleum division because the cost of acquiring crude oil is difficult to anticipate.
Competition The retail space is extremely competitive in canada. Some major competitors have been identified and can be found in (CITE:exhibit 2). It is important to be aware of CTC’s strategy and its goals of staying competitive. There is a trend of US retailers moving into Canada, such as Target.
Seasonality
Both the Retail and Petroleum
Canadian Tire Corporation, Limited (CTC) is primarily a canadian retailer, focusing on automotive and general merchandise. Founded in 1922, the company has been around for almost a century, building strong brand recognition in Canada. Initially starting as a car parts retailer they have expanded rapidly into other areas, mainly general merchandise retail. They have other secondary divisions being; Partsource Automotive stores (strictly automotive parts), Financial Services, Mark’s Work Wearhouse (clothing retailer), FGL Sports Ltd. (various sporting good retail chains), and Canadian Tire Petroleum (gas stations and car washing). The main users of CTC’s financial statements have been identified as the debt holders and shareholders.
Industry
There are many external factors affecting Canadian Tire Corporation (CITE: EXHIBIT 1). As the largest business divisions, the major external forces impacting the Retail and Financial Services divisions are listed below.
Economic Forces Canadian unemployment is a good indicator of consumers’ willingness to spend. Currently unemployment is trending upwards (CITE: EXHIBIT 3). This is poor for the retail industry as consumer spending will decrease as unemployment increases. It impacts all of CTC’s divisions.
Volatile Petroleum Costs Crude oil prices have been extremely volatile lately (CITE FIGURE Z). This has an impact on the supply chain of retailers, as transportation costs will increase with increased fuel costs. This also heavily impacts the Petroleum division because the cost of acquiring crude oil is difficult to anticipate.
Competition The retail space is extremely competitive in canada. Some major competitors have been identified and can be found in (CITE:exhibit 2). It is important to be aware of CTC’s strategy and its goals of staying competitive. There is a trend of US retailers moving into Canada, such as Target.
Seasonality
Both the Retail and Petroleum