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Case Study (Exam Prep) - Kenaston Convinience Store

Its your job to make contact with the owners

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Unformatted text preview: e owners of established convenience stores that CMS might be interested in and evaluate their suitability for acquisition. Your preliminary evaluation of KCS is that it is a potential candidate for acquisition and your initial discussions with Mr. Wu were favourable. Mr. Wu has agreed to allow you to look at KCS’s most recent income statements. The income statements are presented below: Kenaston Convenience Store Income Statements for the years ended March 31 2009 2008 Revenue $417,250 $368,425 Cost of sales 258,695 225,845 Gross Margin 158,555 142,580 Expenses Amortization of capital assets Interest Utilities Other Advertising and promotion Salaries and wages Repairs and maintenance Income taxes Total expenses Net income 32,000 34,200 15,200 14,700 7,500 6,200 17,400 13,900 6,200 4,500 2,000 4,150 12,565 94,315 $64,240 2,200 2,750 5,400 86,550 $56,030 In addition, you obtained the following information from your discussion with Mr. Wu and from observing the business: 1 KCS is located in a two-storey, 30-old...
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