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I just checked, Four Season International (the corporation that operates hotels), has had a very bad first quarter. Consider the following changes to Four Season's
- I just checked, Four Season International (the corporation that operates hotels), has had a very bad first quarter. Consider the following changes to Four Season's income statement between the first quarters of 2021 and 2022 (all values in millions). Notice that net income was negative in the first quarter.
Q1 | Q1 | |
2021 | 2022 | |
Revenue | 2369 | 933 |
Operating Expenses | 2021 | 922 |
Operating Income | 348 | 11 |
Non-Operating Income and Expenses | -173 | -90 |
Net Income | 175 | -79 |
TFU and explain: Given that Four Season's net income is negative and given that it will be relatively straightforward to resume operations once the pandemic is over (unemployment is high in the hospitality industry so laid off workers will be easy to rehire), Four Season's would be better off to shut down until the pandemic is over (that is, economic profits will be higher). (5)
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