Purchase Solution

Financial performance: Landry's Restaurants

Not what you're looking for?

Ask Custom Question

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. Net profit Margin
b. Gross profit margin
c. Fixed asset turnover
d. Return on equity (ROE)
e. Earnings per share
f. Quality of income
g. Receivables turnover
h. Inventory turnover
i. Current ratio
j. Debt to total assets
k. Times interest earned
l. Cash coverage
m. Capital acquisition ratio
Complete the calculations in a Microsoft Excel workbook where you will show your calculations. Also, in the workbook, explain what each of these ratios mean and what the change from year to year means to Landry's. Be sure to cite what your analysis tells you about Landry's financial performance.

Purchase this Solution

Solution Summary

The solution in a word and an excel file for Landry's Restaurants.

Solution Preview

Running Head: LANDRY'S RESTAURANTS

Financial Performance: Landry's Restaurant

Landry's Restaurant Financial Performance
Financial ratio analysis is one of the widely used tool or technique used to equate the risk and return relationship of the companies exisiting in the same area. Mainly, it is applied to understand the financial statements, so that it will be easy for the investors to easily find out the company's strength and weakness, as well as its historic functioning and current financial conditions in the competitive market.
a) Net profit Margin: Net profit margin ratio means the relationship between the net profit and net sales of the company. The net profit margin is indicative of management's power to run the business with the enough success or it points out the overall profitability and skillfulness (Van Horne, Wachowicz & Bhaduri, 2008).Landry's net profit margin is showing slightly decreasing trend as compared to last year i.e. 2002, due to continuous fall in the total of net profit. For Landry's, the changes from year 2002 to 2003 means that there is less effectiveness for the use of company's resources and decrease in the funds available for the owners and it is also not able to retain its image in tough competition.
b) Gross Profit Margin: This ratio indicates the relationship between prices, sales volume and costs. Gross profit margin ratio means that whether the company has effective dealing or basic profit earning potentiality or not. Mainly, it assesses the share of each sales dollar remaining; after the company has paid for its products (Van Horne, Wachowicz & Bhaduri, 2008). Gross profit margin also was reflecting the decreasing trend i.e. 71.17% (2002) to 70.90% (2003). This change means to the Landry's that its net profit was going down in comparability to sales and indicates the danger signal. It justifies a detailed financial evaluation of the factors responsible for it.
c) Fixed Asset Turnover: A financial ratio that expresses the relationship between the ...

Solution provided by:
Education
  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
Recent Feedback
  • "Thank You so much! "
  • "Always provide great help, I highly recommend Mr. Sharma over others, thanks again. "
  • "great job. I will need another help from you. "
  • "first class!"
  • "Thank you for your great notes. Will you be willing to help me with one more assignment? "
Purchase this Solution


Free BrainMass Quizzes
Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.