Rations needed Profitability, asset turnover, liquidity, solvency and market

Lassonde Industries Inc. manufactures and sells fruit and vegetable juices and drinks, as well as specialty food products under such brand names as Oasis, Fruit, 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) 2018 2017 $1,593,996 $1,526,148 Sales 1.166,159 1,088,076 Cost of sales 322,621 305,378 Selling and administrative expenses 24 (596) (Gains) losses on capital assets 1,488,804 1,392.858 105,192 133,290 Operating profit 105,192 133,290 Operating profit 15,136 12,216 Financial expenses 1,110 (250) Other (gains) losses 88,946 121,324 Profit before income taxes 20,931 25,826 Income tax expense $ 68,015 $ 95,498 Profit Attributable to: 66,382 89,949 Company shareholders 1,633 5,549 Non-controlling interest $ 68.015 $ 95,498 $ 9.50 $ 12.87 Basic and diluted earnings per share (in $) 6,987 6,988 Weighted average number of shares outstanding (in thousands) LASSONDE INDUSTRIES INC. Consolidated Statement of Financial Position For the Years Ended December 31, (in thousands of Canadian dollars) 2017 2018 Assets Current $ 4,575 $ 16,234 Cash and cash equivalents 147,137 131,636 Accounts receivable 5,613 900 Income tax recoverable 238,667 207,849 Inventories 270 8,271 Derivative instruments 12,708 12,447 Other current assets 416,971 369,336 Total current assets 1,041 Derivative instruments 305,581 273,306 8,271 270 Derivative instruments 12,708 12,447 Other current assets 416,971 369,336 Total current assets 1.041 Derivative instruments 305,581 273,306 Property, plant, and equipment 271,423 199,785 Intangible assets 6.704 11.888 Net defined benefit asset 1.113 921 Other long-term assets 316.814 199.434 Goodwill $1,318.606 $1,055,711 Total assets Liabilities Current $ 4,998 Bank overdraft $ 210,203 195.578 Accounts payable and accrued liabilities 3.148 5.937 Income tax payable 3,148 5,937 Income tax payable 1,719 5,354 Derivative instruments 1.130 1,270 Other current liabilities 24,580 9,807 Current portion of long-term debt 240,780 222,944 Total current liabilities 1,114 102 Derivative instruments 1,007 4,228 Net defined benefit liability 297,267 158,915 Long-term debt 54,959 44,560 Deferred tax liabilities 1.228 Other long-term liability 596,355 430,749 Total liabilities Shareholders' equity 48.678 48.864 Share capital 1,380 1.382 Contributed surplus 96,466 51,762 Accumulated other reserves 1,380 1,382 Contributed surplus 96,466 51,762 Accumulated other reserves 521,769 477,576 Retained earnings 53,958 45,378 Non-controlling interest 722.251 624.962 Total shareholders' equity $1,318.606 $1,055,711 Total liabilities and shareholders' equity Page 728 LASSONDE INDUSTRIES INC. Consolidated Statement of Cash Flows (partial) For the Years Ended December 31, (in thousands of Canadian dollars) (audited) 2018 2017 Operating activities $ 68,015 $ 95,498 Profit Adjustments for: 20,931 25,826 Income tax expense 14.464 11.508 Interest expense Interest expense 14,464 11.508 Depreciation of property, plant, and equipment and amortization of intangible assets 48,752 45,214 Amortization of unearned discounts and unused tax credits (279) (550) Change in fair value of financial instruments 1,541 (19) Cost of the defined benefit plans recognized in profit or loss, net of contributions 4,841 (2,457) (Gains) losses on capital assets 24 (596) Unrealized foreign exchange (gains) losses 853 (1,697) 159.142 172.727 Change in non-cash operating working capital items (7.822) 5.078 Income tax received 790 1,570 Income tax paid (23,696) (24,997) Interest received 155 68 Interest paid (13,922) (9.362) Settlements of derivative instruments 38 (185) Net cash provided by operating activities $114,685 $144,899 Additional information related to 2016 at yearend is as follows: Page 729 Shareholders' equity $S5.581 Total assets 1.103.041 Property, plant, and equipment 268.829 Accounts receivable 137.924 Inventories 217.646 Accounts payable and accrued liabilities 199,519 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 Si 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