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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

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    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

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