1. HEMI's Accountant asks you to evaluate HEMI's 2022 financial performance against Wajax using common-size Statements...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. HEMI's Accountant asks you to evaluate HEMI's 2022 financial performance against Wajax using common-size Statements of Income. This request requires you to provide common-size statements and provide a written analysis of what the common-size statements indicate in terms of financial performance. You may use Excel to create common-size Statements of Income and paste your Excel table back into this MS Word document (do not link your Excel file). You are provided with the following HEMI's Statement of Income for the year ended October 31, 2022 and Wajax's Statement of Income for the year ended December 31, 2022 (7 marks) HEMI (in thousands of dollars, except per share data) Revenues $744,131 Cost of sales 571,000 Gross profit 173,131 Selling and administrative expenses 104,167 Earnings before finance costs and 68,964 Income taxes Financing costs 21,079 Earnings before income taxes 47,885 Income tax expense 25,000 Net Income $22,885 Earnings per Share $2.95 Wajax Statement of Income Consolidated Statements of Earnings Revenue Note 21 2022 2021 $1,962,822 $1,637.281 Cost of sales 1.572.500 1.305.427 Gross profit 390,313 331.854 Selling and administrative expenses 276,456 239,553 Earnings before finance costs and income taxes 113.857 92,301 Finance costs 23 17,345 19.133 Earnings before income taxes 96,512 73.168 Income tax expense 24 24,104 19.920 Net earnings 72,408 $ 53.248 Basic earnings per share Diluted eamings per share 19 $ 19 3.38 $ 3.26 2.50 2.42 Analysis (continued) 2. HEMI has some extra cash to invest. HEMI's Accountant asks you if HEMI should buy Wajax common shares at a market price of approximately $28 per share. You may use the Scotia Capital's Research Report pdf file or other publicly available information to support your answer. Write your answer in full sentences below. (7 marks). 1. HEMI's Accountant asks you to evaluate HEMI's 2022 financial performance against Wajax using common-size Statements of Income. This request requires you to provide common-size statements and provide a written analysis of what the common-size statements indicate in terms of financial performance. You may use Excel to create common-size Statements of Income and paste your Excel table back into this MS Word document (do not link your Excel file). You are provided with the following HEMI's Statement of Income for the year ended October 31, 2022 and Wajax's Statement of Income for the year ended December 31, 2022 (7 marks) HEMI (in thousands of dollars, except per share data) Revenues $744,131 Cost of sales 571,000 Gross profit 173,131 Selling and administrative expenses 104,167 Earnings before finance costs and 68,964 Income taxes Financing costs 21,079 Earnings before income taxes 47,885 Income tax expense 25,000 Net Income $22,885 Earnings per Share $2.95 Wajax Statement of Income Consolidated Statements of Earnings Revenue Note 21 2022 2021 $1,962,822 $1,637.281 Cost of sales 1.572.500 1.305.427 Gross profit 390,313 331.854 Selling and administrative expenses 276,456 239,553 Earnings before finance costs and income taxes 113.857 92,301 Finance costs 23 17,345 19.133 Earnings before income taxes 96,512 73.168 Income tax expense 24 24,104 19.920 Net earnings 72,408 $ 53.248 Basic earnings per share Diluted eamings per share 19 $ 19 3.38 $ 3.26 2.50 2.42 Analysis (continued) 2. HEMI has some extra cash to invest. HEMI's Accountant asks you if HEMI should buy Wajax common shares at a market price of approximately $28 per share. You may use the Scotia Capital's Research Report pdf file or other publicly available information to support your answer. Write your answer in full sentences below. (7 marks).
Expert Answer:
Related Book For
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
Posted Date:
Students also viewed these accounting questions
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
What types of costs are associated with a Stance" sock vending machine located in an airport? At Cleveland Hopkins International Airport in northeastern Ohio, a vending machine that dispenses socks...
-
What are two primary economic arguments that critics use against free trade?
-
Find the constants a and b, where a || [ (x 4) dx = So |x - 4| dx = 20. 16 and
-
Consider the following cash flow profile and assume MARR is 10 percent/year and the finance rate is 4 percent/year. a. Determine the MIRR for this project. b. Is this project economically attractive?...
-
Comprehensive Three-Part Revenue Recognition Van Hatten Industries has three operating divisionsDepp Construction Division, Dement Publishing Division, and Ankiel Securities Division. Each division...
-
Crystal Corporation earned net income of $ 9 0 0 , 0 0 0 in 2 0 2 3 . It has a complex capital structure as follows: 1 2 , 0 0 0 shares outstanding of 8 % , $ 1 0 0 preferred stock, and 1 7 0 , 0...
-
When a customer loyalty plan is offered, how is the transaction price from each sale accounted for? A. All of the revenue is deferred until the loyalty awards are provided to the customer. B. The...
-
Describe why feasibility studies are necessary. How is a SWOT analysis used to develop a marketing plan Explain why it is necessary to segment. What are the elements that make up segmentation How...
-
Explain how Base Erosion Profit Shifting (BEPS) initiative is changing the dynamics of Double Tax Agreements (DTA) and Transfer Pricing regimes around the world and how these will impact on Fiji's...
-
Why will profit-maximizing managers never use a dominated strategy?
-
How can insurance be used to transfer risk? Provide a simple example of a risk that could be transfered by writing an insurance policy.
-
What is a risk register and why is it used? What is project risk control? Why is it important? When it is important to create a risk assessment chart? What is contained in a risk mitigation matrix?...
-
Task #3. Find the diagonal angle w of the quadrilateral inscribed into a clock face (circle) with vertices at 2-5-6-10. 12 1 C D C 9 s 8 d A a B 1.
-
If |62x|>9, which of the following is a possible value of x? A. 2 B. 1 C. 0 D. 4 E. 7
-
Explain why stockholders equity is increased by revenues and decreased by expenses.
-
Ava School of Learning obtained a charter at the start of the year that authorized 50,000 shares of no-par common stock and 20,000 shares of preferred stock, par value $ 10. During the year, the...
-
Refer to the financial statements of The Home Depot in Appendix A at the end of this book, or download the annual report from the Cases section in the Connect library. Required: 1. How much did The...
-
Decide whether the system in Problem 4 is stable. A linear dynamic system is stable if the homogeneous solution of its mathematical model, subjected to the prescribed initial conditions, decays. More...
-
Perform the indicated operations, if defined, for the following vectors and matrices. \(\left(\mathbf{B}-\mathbf{v} \mathbf{w}^{T} ight) \mathbf{A}\) -2 1 -3 1 1 A = 1 -3 2 1 32 B = V= W = 0 0 4 5
-
Perform the indicated operations, if defined, for the following vectors and matrices. \(\left(\mathbf{A B}^{T} ight) \mathbf{v}\) -2 1 -3 1 1 A = 1 -3 2 1 32 B = V= W = 0 0 4 5
Study smarter with the SolutionInn App