AP12-5 Analyzing Financial Statements by Using Appropriate Ratios (P12-8) 012-5, 12-6, 12-7. 12-8, 12-9 Lassonde Industries Inc. Page 27 Xcel Lassande Industries Inc. manufactures and sells fruit and vegetable juices and drinks, as well as specialty food products under such brand names as Oasis, Fruite, Fairlee, and Canadian Club. The company's products are distributed to wholesalers, supermarkets, and food service providers. The following information was reported in a recent annual report: LASSONDE INDUSTRIES INC. Consolidated Statement of Income For the Years Ended December 31, (in thousands of Canadian dollars) 2017 2018 Sales Cost of sales $1,593,996 $1,526,148 1.166,159 1.088,076 Selling and administrative expenses (Gains) losses on capital assets 322621 305,378 24 (596 1.488,804 1,392.858 105,192 133,290 15.136 Operating profit Financial expenses Other (gains) losses Profit before income taxes 1.110 12.216 (250) 121.324 88,946 Income tax expense 20.931 25,826 $ 68,015 $ 95,498 Profit Attributable to Company shareholders Non-controlling interest 66,382 89.949 1,633 5,549 5 68,015 $ 95,498 S 9.50 5 Basic and diluted earnings per stare in S) Weighted average number of shares outstanding in thousands) 12.87 6.987 6,988 LASSONDE INDUSTRIES INC. Consolidated Statement of Financial Position For the Years Ended December 31, (in thousands of Canadian dollars) 2018 2017 Assets Current 4,575 $ 16,234 147.137 131.636 5,613 900 Cash and cash equivalents Accounts receivable Income tax recoverable Inventories Derivative instruments Other current assets Total current assets 238,667 207,849 8,271 270 12,708 12447 416,971 369,336 Derivative Instruments 1.041 Property, plant, and equipment 305,381 273,306 Intangible assets 271.423 199.785 Aa Net defined benefit asset 6,704 11,888 1.113 921 316,814 199,434 $1,055,711 $1,318,606 Other long-term assets Goodwill Total assets Liabilities Current Bank overdraft Accounts payable and accrued liabilities Income tax payable Derivative instruments Other current liabilities Current portion of long-term debt Total current liabilities $ 4.998 $ 210.203 195,578 3.148 5,937 1.719 5,354 1,130 1.270 24.580 9,807 240,780 222,944 Derivative instruments 1.114 102 Net defined benefit liability Long-term debt 1.007 4.228 297.267 158,915 54,959 44,560 1.228 596,355 430,749 48,678 48.864 Deferred tax liabilities Other long-term liability Total liabilities Shareholders equity Share capital Contributed surplus Accumulated other reserves Retained carnings Non-controlling interest Total shareholders' equity Total liabilities and shareholders' equity 1,380 1.382 96,466 51.762 521,769 477,576 53.958 45,378 722.251 624962 $1,318,606 $1.055.711 Pace LASSONDE INDUSTRIES INC. Consolidated Statement of Cash Flows (partial) For the Years Ended December 31, (in thousands of Canadian dollars) (andited) 2018 2017 Operating activities Profit $ 68,015 $ 95.498 20.931 25,826 14,464 11,508 48,752 45.214 Adjustments for Income tax expense Interest expense Depreciation of property, plant, and equipment and amortization of intangible assets Amortization of uncarned discounts and unused tax credits Change in fair value of financial instruments Cost of the defined benefit plans recognized in profit or loss, net of contributions (Gains) losses on capital assets Unrealized foreign exchange (gains) losses (279) (550) 1.541 (19) 4.841 (2.457) 24 (596) 853 (1.697) 159.142 172.727 (7.822) 5,078 790 1.570 (23,696) (24.997) 155 Change in non-cash operating working capital items Income tax received Income tax paid Interest received Interest paid Settlements of derivative instruments Net cash provided by operating activities Source: Lamonde Industries Inc. Ameport 2018 68 (13.922) (9.362) 38 (185) $144,899 $114,685 Pare 729 $ 585,581 Additional information related to 2016 at year-end is as follows: Shareholders' equity Total assets Property, plant, and equipment Accounts receivable 1,103,641 268.829 137.924 Inventories 217,646 Accounts payable and accrued liabilities 199,819 The company declared and paid a dividend of $2.34 per share during fiscal year 2017 and $3,04 per share during fiscal year 2018. The market price per share was $251.77 at December 31, 2017 and $199.22 at December 31, 2018 Required: 1 Compute the ratios discussed in this chapter for the past two years. If there is insufficient information, describe what is missing and explain what you would do 2. Assume the role of an investment adviser. A client of yours has the opportunity to invest $1 million in shares of international companies. Prepare a written evaluation of relevant ratios and indicate whether you would recommend to your client that the si million be invested in the shares of Lassonde Industries AP12-5 Analyzing Financial Statements by Using Appropriate Ratios (P12-8) 012-5, 12-6, 12-7. 12-8, 12-9 Lassonde Industries Inc. Page 27 Xcel Lassande Industries Inc. manufactures and sells fruit and vegetable juices and drinks, as well as specialty food products under such brand names as Oasis, Fruite, Fairlee, and Canadian Club. The company's products are distributed to wholesalers, supermarkets, and food service providers. The following information was reported in a recent annual report: LASSONDE INDUSTRIES INC. Consolidated Statement of Income For the Years Ended December 31, (in thousands of Canadian dollars) 2017 2018 Sales Cost of sales $1,593,996 $1,526,148 1.166,159 1.088,076 Selling and administrative expenses (Gains) losses on capital assets 322621 305,378 24 (596 1.488,804 1,392.858 105,192 133,290 15.136 Operating profit Financial expenses Other (gains) losses Profit before income taxes 1.110 12.216 (250) 121.324 88,946 Income tax expense 20.931 25,826 $ 68,015 $ 95,498 Profit Attributable to Company shareholders Non-controlling interest 66,382 89.949 1,633 5,549 5 68,015 $ 95,498 S 9.50 5 Basic and diluted earnings per stare in S) Weighted average number of shares outstanding in thousands) 12.87 6.987 6,988 LASSONDE INDUSTRIES INC. Consolidated Statement of Financial Position For the Years Ended December 31, (in thousands of Canadian dollars) 2018 2017 Assets Current 4,575 $ 16,234 147.137 131.636 5,613 900 Cash and cash equivalents Accounts receivable Income tax recoverable Inventories Derivative instruments Other current assets Total current assets 238,667 207,849 8,271 270 12,708 12447 416,971 369,336 Derivative Instruments 1.041 Property, plant, and equipment 305,381 273,306 Intangible assets 271.423 199.785 Aa Net defined benefit asset 6,704 11,888 1.113 921 316,814 199,434 $1,055,711 $1,318,606 Other long-term assets Goodwill Total assets Liabilities Current Bank overdraft Accounts payable and accrued liabilities Income tax payable Derivative instruments Other current liabilities Current portion of long-term debt Total current liabilities $ 4.998 $ 210.203 195,578 3.148 5,937 1.719 5,354 1,130 1.270 24.580 9,807 240,780 222,944 Derivative instruments 1.114 102 Net defined benefit liability Long-term debt 1.007 4.228 297.267 158,915 54,959 44,560 1.228 596,355 430,749 48,678 48.864 Deferred tax liabilities Other long-term liability Total liabilities Shareholders equity Share capital Contributed surplus Accumulated other reserves Retained carnings Non-controlling interest Total shareholders' equity Total liabilities and shareholders' equity 1,380 1.382 96,466 51.762 521,769 477,576 53.958 45,378 722.251 624962 $1,318,606 $1.055.711 Pace LASSONDE INDUSTRIES INC. Consolidated Statement of Cash Flows (partial) For the Years Ended December 31, (in thousands of Canadian dollars) (andited) 2018 2017 Operating activities Profit $ 68,015 $ 95.498 20.931 25,826 14,464 11,508 48,752 45.214 Adjustments for Income tax expense Interest expense Depreciation of property, plant, and equipment and amortization of intangible assets Amortization of uncarned discounts and unused tax credits Change in fair value of financial instruments Cost of the defined benefit plans recognized in profit or loss, net of contributions (Gains) losses on capital assets Unrealized foreign exchange (gains) losses (279) (550) 1.541 (19) 4.841 (2.457) 24 (596) 853 (1.697) 159.142 172.727 (7.822) 5,078 790 1.570 (23,696) (24.997) 155 Change in non-cash operating working capital items Income tax received Income tax paid Interest received Interest paid Settlements of derivative instruments Net cash provided by operating activities Source: Lamonde Industries Inc. Ameport 2018 68 (13.922) (9.362) 38 (185) $144,899 $114,685 Pare 729 $ 585,581 Additional information related to 2016 at year-end is as follows: Shareholders' equity Total assets Property, plant, and equipment Accounts receivable 1,103,641 268.829 137.924 Inventories 217,646 Accounts payable and accrued liabilities 199,819 The company declared and paid a dividend of $2.34 per share during fiscal year 2017 and $3,04 per share during fiscal year 2018. The market price per share was $251.77 at December 31, 2017 and $199.22 at December 31, 2018 Required: 1 Compute the ratios discussed in this chapter for the past two years. If there is insufficient information, describe what is missing and explain what you would do 2. Assume the role of an investment adviser. A client of yours has the opportunity to invest $1 million in shares of international companies. Prepare a written evaluation of relevant ratios and indicate whether you would recommend to your client that the si million be invested in the shares of Lassonde Industries