The financial statements of Jean Coutu are presented in Appendix B following the financial statements for Shoppers

Question:

The financial statements of Jean Coutu are presented in Appendix B following the financial statements for Shoppers Drug Mart in Appendix A.

Instructions

(a) Refer to the statement of earnings for Shoppers and the statement of income for Jean Coutu and find the earnings per share for each company for the most recent fiscal year. Is there a difference between basic and diluted earnings per share for either company?

(b) Calculate the payout ratio, dividend yield, and price-earnings ratios for each company for the most recent fiscal year.

To determine the amount of cash dividends paid for the payout ratio calculation, look at the retained earnings section of the statement of changes in equity. The dividend per share for the dividend yield ratio calculation was $0.28 for Jean Coutu and $1.08 for Shoppers. At the end of each company's fiscal year, Jean Coutu's share price was $15.78 and Shoppers' share price was $42.80.

(c) Can you determine which company investors interested in dividend income might favour based on your answers in (a) and (b)? Identify which ratios you used to come to your conclusion.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...