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Landry's Restaurants: analyzing financial statements

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Using the financial statements of Landry's Restaurants 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)?

December 31, 2003 2002
Food and beverage $32,458,803 $29,124,594
Retail goods 15,313,495 11,754,781
$47,772,298 $40,879,375

PROPERTY AND EQUIPMENT AND OTHER ASSETS
Property and equipment is comprised of the following:
December 31, 2003 2002
Land $170,163,593 $138,379,047
Buildings and improvements 222,903,558 195,445,593
Furniture, fixtures & equipment 234,372,485 179,119,008
Leasehold improvements 498,030,942 398,384,738
Construction in progress 64,349,939 86,968,286
1,189,820,517 998,296,672
Less-accumulated depreciation (224,245,526) (167,366,541)
Property and equipment, net $965,574,991 $830,930,131

Year Ended December 31, 2003 2002 2001
Asset Impairment $13,100,000 $2,200,000 $2,394,000
Accrued Estimated Lease
Termination Payments 1,300,000 - -
Estimated
Severance Costs - - -
$14,400,000 $2,200,000 $2,394,000

Other current assets are comprised of the following:
December 31, 2003 2002
Prepaid expenses $3,490,137 $4,439,300
Assets held for sale (expected to be sold within one year) 3,384,925 3,585,925
Marketable securities - 2,752,979
Deposits 615,321 995,812
$7,490,383 $11,774,016

Accrued liabilities are comprised of the following:
December 31, 2003 2002
Payroll and related costs $15,533,279 $14,708,991
Rent, insurance and taxes, other than payroll and income taxes 37,028,881 36,628,732
Deferred revenue (gift certificates) 10,455,869 9,085,304
Other 11,494,612 13,814,543
$74,512,641 $74,237,570

Year Ended December 31, 2003 2002
$200.0 million Bank syndicate credit facility, LIBOR + 1.875%, interest only, due October 2007 $122,000,000 -
$150.0 million Senior Notes, average 5.95%, interest only, maturities ranging from October 2009 to October 2013 150,000,000 -
$20.0 million seller note, 5.5% interest, quarterly principal and interest payments of $653,386, due 2009 18,055,321 19,621,614
$220.0 million Bank syndicate credit facility, LIBOR + 2.5%, interest only, due July 2004 - 171,000,000
Non-recourse long-term note payable, 9.39% interest, principal and interest aggregate $101,762 monthly, due May 2010 11,318,664 -
Other long-term notes payable with various interest rates, principal and interest paid monthly 325,110 565,412
Total Debt 301,699,095 191,187,026
Less current portion (1,963,189) (1,783,427)
Long-term portion $299,735,906 $189,403,599

Year Ended December 31, 2003 2002 2001
Interest expense $9,634,872 $5,133,219 $9,685,201
Interest income (73,390) (136,197) (282,850)
$9,561,482 $4,997,022 $9,402,351

Year Ended December 31, 2003 2002 2001
Net Income $45,901,054 $41,521,616 $26,919,569
Weighted average common
shares outstanding 27,600,000 25,900,000 21,750,000
Dilutive common stock
equivalents-stock options 725,000 1,000,000 785,000
Weighted average common and common equivalent shares outstanding-diluted 28,325,000 26,900,000 22,535,000
Net income
per share-diluted $1.62 $1.54 $1.19

Solution Preview

Using the financial statements of Landry's Restaurants 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)?

December 31, 2003 2002
Food and beverage $32,458,803 $29,124,594
Retail goods 15,313,495 11,754,781
$47,772,298 $40,879,375

PROPERTY AND EQUIPMENT AND OTHER ASSETS
Property and equipment is comprised of the following:
December 31, 2003 2002
Land $170,163,593 $138,379,047
Buildings and improvements 222,903,558 195,445,593
Furniture, fixtures & equipment 234,372,485 179,119,008
Leasehold improvements 498,030,942 398,384,738
Construction in progress 64,349,939 86,968,286
1,189,820,517 998,296,672
Less-accumulated depreciation (224,245,526) (167,366,541)
Property and equipment, net $965,574,991 $830,930,131

Year Ended December 31, 2003 2002 2001
Asset Impairment $13,100,000 $2,200,000 $2,394,000
Accrued Estimated Lease
Termination Payments 1,300,000 - -
Estimated
Severance Costs - - -
$14,400,000 $2,200,000 $2,394,000

Other current assets are comprised of ...

Solution Summary

This solution is comprised of a detailed explanation to compute the following ratios for 2002 and 2003.

$2.19