1. HEMI's Accountant asks you to evaluate HEMI's 2022 financial performance against Wajax using common-size Statements...

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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).