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Description: TD Bank is putting smiles on the faces of many of its employees with the news that 90,000 or so of them will be receiving a $500 bonus. This reward is to thank the employees for their extra efforts during the pandemic. TD’s CEO said “I am incredibly proud of your efforts to support our customers, communities and each other under the most trying circumstances.”

Date:  October 30, 2020



Discussion points:

1) How do you think you would feel if you received this bonus?

2) If you are planning a career as an accountant, does the banking industry interest you?

3) On page 2-32 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read question 20, comparing the price-earnings ratios of TD Bank and CIBC. Answer the question regarding the company that investors seem to favour. Look up current data for these two banks on the web to see if the situation is still the same.

10 Responses to “Now That is Nice”

  1. Montana Branch, Sophie Austin, Drew Besco, Shashank Avindan

    1) If we received this bonus it would increase our motivation knowing that the company knows and recognizes the work that the employees are putting in during these challenging times.
    2) Our group discussed it and if we were to pursue a career as an accountant, the banking industry would interest us because working with a bank would provide us with good job security.
    3) The price earnings ratio is an indicator for investors to assess what the company’s profitability. The higher the ratio means that the company’s earnings will increase, however this is an assumption based on what the investors think. In question 20 TD has a price-earning ratio of 12.7 times and CIBC has a price earning of 9.8 times, showing that investors favour TD. October 30, 2020 TD’s price earning ratio decreased to 11.46 times where CIBC’s Price earning ratio increased to 10.31 times. The situation between TD and CIBC is still the same, however with TD’s price earning ratio decreasing and CIBC’s price earning ratio increasing investor could start to favour CIBC.

    Sources used:

  2. Paige Matchett, Jackson Major, Tara MacKinnon

    1. If we received the $500 bonus, we would feel appreciated for our work and it would further motivate us to continue working hard during these difficult times. This corresponds with some material currently being taught in Organizational Behaviour, in which, employers are implementing various reward and benefits programs to encourage employee motivation and recognize top performing employees. Furthermore, this bonus could enable employees to afford things that they were struggling to obtain due to the current situation (i.e. spouse lose their job so need more money to pay the bills or buy groceries).

    2. If we were planning careers as accountants, the banking industry would absolutely interest us. Regardless of whether we worked within the banking industry (which would offer a secure occupation and typically high salaries) or if we simply corresponded with the banking industry, the role of an accountant will always be interested in that area. This is because every organizational/company will interact with a bank throughout their business activities. As an accountant, it would be our jobs to understand and coordinate with the banking industry to ensure that our loans are being paid off, our cash balances on the books align with our cash balance at the bank, and through multiple other areas.

    3. Question 20 states that TD Bank has a price-earnings ratio of 12.7 times, while CIBC has a price-earnings ratio of 9.8 times. If investors were using the ratios stated, they would favour TD Bank over CIBC because a price-earnings ratio divides market price per share by basic earnings per share, thus, measuring profitability – with higher values being generally seen as better. Therefore, TD Bank will be seen as more profitable than CIBC. Nonetheless, the price-earnings ratio will be higher if investors think that income will decrease (thus decreasing the basic earnings per share value (=denominator), which will increase the price-earnings ratio), and therefore, the ratio is influenced by what investors believe. As of November 2nd, 2020, TD Bank has a price-earnings ratio of 11.6 times, while CIBC has a price-earnings ratio of 11.8 times. Thus, CIBC has surpassed TD Bank and will now appear more profitable to investors.


  3. Gabriel Pascal Champagne, Davide Sebastian Colonna, Alea Sophie Büchel

    1) If we were to receive a $500 bonus for putting in extra efforts during the pandemic, we would feel like we are being appreciated for our work. Also, that appreciation might cause us to feel be motivated to continue working hard during the pandemic. In addition, a bonus can be helpful for those employees that are just getting by on their normal salaries.
    2) None of us are planning to move forward towards a career in accounting, but if we were going to, we all agreed that the banking industry would be of interest to us. This is mainly because of the stability of the industry, the possible benefits that come with it, and how competitive the industry is.
    3) The P/E ratios of TD Bank and CIBC are of 11.3 and 9.8, respectively. Investors seem to prefer TD Bank since their stock price would be higher than CIBC’s if they had the exact same earnings over a period. In other words, investors are okay with paying a higher price for TD’s stock relative to its earnings, therefore meaning it is the more attractive option for investors in general. Currently, their ratios are of 11.5 for TD and 10.08 for CIBC, which is consistent with the data used at the time of the question.

  4. Lucy Poole, Hunter Morley, Nana Kwabena Asare Nti

    1. As employees, receiving this bonus will en ourage us to work harder, be more loyal to the company, and put more trust in management. This is because we know that the bank recognizes and values the hard work of its employees.

    2. I think it is great that TD bank decided to reward a bonus of $500 to their employees for the hard work during the COVID-19 pandemic. TD is not only making their employees happy, but as well can potentially attract more people to work at the bank. Personally I would be more influenced to work at this bank because the CEO understands the great efforts that the employees have made during the pandemic and ultimately rewarded them with a bonus. There are many CEO’s or owners that haven’t done anything to reward their staff for working hard over the course of quarantine and TD has shown that the employees have not gone unnoticed. I would be very thankful if I was to receive a bonus because I worked full time at the grocery store during the pandemic, essential services were the only stores open for months which caused the grocery store to be way busier than normal so I can relate to the hard work of the bank employees.

    3. The price-earnings ratio measures the ratio of a company’s share price to its earnings per share. This ratio is used as a tool for the valuation of companies – a higher price-earnings ratio indicates that a company is more valuable in the eyes of investors.
    In question 20, TD has a P/E ratio of 12.7, while CIBC has a P/E ratio of 9.8. Since 12.7 is greater than 9.8, we can infer that investors seem to favour TD over CIBC.
    As per, TD bank’s P/E ratio today is 11.58, and CIBC’s is 11.79. These ratios are very close to one another but are slightly in favour of CIBC, a change from the time of the publication of the textbook question.


    • Adrianna Dewar, Chacha Dominion, Dylan Corkum

      1) Our group would feel like our work was appreciated and that our team thought we are doing a good job.
      2) Yes. Our group would be interested in working in banking. Though banking is different from accounting, we feel that banking would help us develop many of the same skills and prepare us to be an accountant.
      3) Investors seem to favor TD Bank because there is a higher price-earnings ratio, meaning they are willing to pay more for the same value. The current PE ratio for TD Bank is 11.40 and CIBC’s is 10.03. TD Bank is still preferred to CIBC, but not by as much as it once was.

  5. Hugo Power Dylan Rhyno Rachel Price

    1) Personally, I would feel very happy receiving a 500 dollar bonus. Even if it doesn’t seem like a big bonus it probably felt really good to know you’re appreciated for the hard work the employees have put in because of the pandemic

    2) We all consider the banking industry as future employers. They provide a multitude of career options and the potential to grow within the organization. Banks in Canada are generally known to be good employers offering many benefits and good compensation.

    3) For question 20, it states that TD bank has a price-earnings ratio of 12.7 times and CIBC has a price-earnings ratio of 9.8. Since the price-earnings ratio is price-earnings ratio divides market price per share by basic earnings per share, it is basically measuring profitability. So in this circumstance, investors would choose to invest in TD bank.

    As of Nov 6th, TD bank’s price-earning ratio is 10.1 and CIBC price-earning ratio stands at 11.78. In this circumstance, investors would choose CIBC, as their PE ratio is higher, while not by much, and compared to the previous evaluation, there has been growth in CIBC while TD bank’s price-earnings ratio has decreased. So CIBC appeals much more to investors at this time.


  6. Chris Heo, Ben Hopper, Will Fenton

    1) If we were to receive any bonus, we would be proud of ourselves because we basically worked for it. But still, we would be proud to be in part of the employees. This is a great example to motivate and improve employees’ performance.

    2) If we were an accountant to one of these suppliers, we would advise our employer to go for a comparable type of return and I would advise the supplier to communicate to the larger chains to find a fair fee in response to the latest move. The supplier could look for discounts with the larger chains on select products. This statement: “The tone of Loblaw’s letter, which argued the company is protecting consumers from higher food prices by implementing new fees, was telling” (Charlebois, 2020) shows how they must make fees in order to keep the costs of food at a reasonable price, but they could order select foods that they could get discounts on.

    3) We believe that the decision to charge these fees is unethical. The companies are charging very high prices for foods and since it is Loblaw’s that owns all the companies that sell these goods such as Superstore, The Independent, Walmart and various other stores so that means that they have no competition or at least very little competition so it can be hard to see why they are coming up with these fees and raising prices. It seems unfair to increase the fees towards the suppliers because like I said earlier there is little to no competition in this market, so the suppliers have no choice but to keep selling with the increased fees.

  7. Akhilesh Penta, Efe Onal, Jacob Myra

    1. If we received such bonus, then we would feel motivated towards our work, followed up by being loyal towards our organization because we would know that the organization values us and the hard work we put in.

    2. We actually do not plan on pursuing a career as an accountant, but if we did then two of our team members would find interest working in the banking industry because it provides job security along with a lot of experience because banking industry is a place full of competition. The other member of our team finds interest in the private sector and hence, he would not work in the banking industry.

    3. According to question 20, it shows that TD bank has a price-earning ratio of 12.7. On the contrary, CIBC has a price-earnings ratio of 9.8. If the investors favor the company according to their price-earning ratios then they would go for TD Bank as they have a higher ratio compared to that of CIBC’s ratio. Market price per share by basic earnings per share equals to price-earning ratio which means measuring the profitability and hence, investors would favor those companies from which they would get higher profits. However, seeing the current situation, the ratio of TD bank has decreased to 10.01 and the price-earning ratio of CIBC has increased to 11.78. Keeping this in consideration, the investors would favor CIBC as their ratio is comparatively higher than that of TD bank’s.

  8. Myaella Letourneau, Alexa Kastner, Jack Hooper

    1) We would all be very happy to receive this bonus because it is always nice to know that your hard work is being recognized. Getting this bonus would would likely drive us to work harder and be more motivated in my job.

    2) One of us is planning on pursuing a career as an accountant but not in the banking industry because she is not interest in it. She finds is too big of an organization and she would rather work for a smaller business and not have to worry about millions of customers.

    3) “The TD Bank has a price-earnings ratio of 12.7 times, while CIBC has a price-earnings ratio of 9.8 times. ”“A higher price-earnings ratio indicates that investors consider that the company’s earning potential will be higher in the future.”

    Therefore, we see that investors consider TD bank has a higher earning potential, so it is favoured by investors.

    As of November 3rd, TD’s price-earnings ratio is at 11.06 and CIBC is at 10.31 (from This means that still, TD has a higher ratio but it has decreased, whereas CIBC has increased and is not much lower than TD. So, investors still favour TD but it is close.

  9. Pushkaraj Jadhav

    1) Personally, I would really appreciate the $500 bonus for putting extra efforts during the pandemic, as it will make me feel recognized for my work, and motivate me to work even harder to achieve company goals

    2) If I’m planning a career as an accountant, I would definitely be interested in the bank industry as it provides multiple career opportunities with proper job security. Also, Canadian Banks are known to be good employers

    3) The price-earnings ratio is the ratio of market price per share by basic earnings per share. The higher the ratio, the profitability increases. In question 20, investors will choose to invest in TD bank over CIBC as it’s ratio is 12.7 times, which is higher than CIBC’s price-earnings ratio – 9.8

    According to the current status, CIBC’s PE ratio is 11.78 which is higher than TD’s- 10.10. This means CIBC surpasses TD and investors would prefer CIBC now even due to this small difference in the PE ratios



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