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    Landry's Financial Performance

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    Using the financial statements of Landry's Restaurants located in Appendix A of the text, Fundamentals of Financial Accounting 1st ed., by Phillips, Libby, and Libby, compute the following ratios for 2002 and 2003:
    a. Earnings per share
    b. Return on assets
    c. Current ratio
    d. Times interest earned
    e. Fixed Asset turnover
    f. Debt to total assets
    g. Current cash debt coverage
    h. Cash debt coverage
    i. Free cash flow
    Based on your analysis, what does this tell you of Landry's financial performance (consider the changes between years)?

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    Solution Preview

    a) Net Profit Margin:

    Net profit margin represents the percentage of sales revenues that
    ultimately make it into net income, after deducting expenses.

    b) Gross Profit Margin:

    A profitability ratio indicating the relationship between cost of goods sold (cost of revenues), and Revenues. A high gross profit margin indicates that a business can make a reasonable profit on sales, as long as it keeps overhead costs in control.

    c) Fixed Assets Turnover:

    This is an asset utilization ratio that tells you ...

    Solution Summary

    The solution uses Landry's finance statements to determine its financial performance.