FSA Project - Part 2.doc Document Preview: FINANCIAL HIGHLIGHTS(1)FISCAL YEAR XXXXXXXXXX XXXXXXXXXX2007($’s in 000’s, except per share data, and average weekly sales)STATEMENT OF OPERATIONS...

The Annual Report Project
    The Annual Report Project
    2011
Employee Retirement Plans & Stock-Based Compensation
1. Does the company offer a pension plan? If so, what type? (Defined Benefit / Defined Contribution)
No, company does not offer any pension plan.
2. Use the format below to analyze the plan.
(Defined Benefit Plan)
a. Compare pension expense with operating revenue.
N.A
    
    Current year
    Last year
    Two years ago
    A. Pension Expense
    
    
    
    B. Operating Revenues
    
    
    
     A / B
    
    
    
b. Compare pension expense with income before income taxes.
N.A
    
    Current year
    Last year
    Two years ago
    A. Pension Expense
    
    
    
    B. Income before income taxes
    
    
    
     A / B
    
    
    
c. Compare benefit obligation with value of plan assets.
N.A
    
    Current year
    Last year
    Benefit obligation
    
    
    FV plan assets
    
    
    Overfunded ( underfunded)
    
    
d. Analyze rates:
N.A
    Discount Rate
    Current year
    Last year
    Two years ago
    Combined weighted-Average Rate
    
    
    
    Rate of Compensation increase
    Current year
    Last year
    Two years ago
    U.S. Plans
    
    
    
    Expected Return on Plan Assets
    Current year
    Last year
    Two years ago
    U.S. Plans
    
    
    
(Defined Contribution Plan)
a. Compare pension expense with operating revenue.
N.A
    
    Current year
    Last year
    Two years ago
    A. Pension Expense
    
    
    
    B. Operating Revenues
    
    
    
     A / B
    
    
    
b. Compare pension expense with income before income taxes.
N.A
    
    Current year
    Last year
    Two years ago
    A. Pension Expense
    
    
    
    B. Income before income taxes
    
    
    
     A / B
    
    
    
3. Comment on any changes over the past few years in these pension plans.
N.A
4. Briefly discuss any stock-based compensation that your company offers.
a. Describe what they offer
b. List outstanding values at fiscal year-end
Company does not offer any stock-based compensation to its employees.
Income Statement
1.
What is the period covered by the income statements?
Period covered by the income statement are year ending 31st Dec 2009, 31st Dec 2010, 31st Dec 2011.
2.
Does the format of the statement most closely follow a single step or multiple step income statement? How can you tell?
Format of the income statement of the company closely follows multiple step income statement formats, as the company has shown many items of expenses separately apart from the segment expenses.
3.
Give the amounts and ratios for the following income statement items over the past three years?
     
    2011
    2010
    2009
     
    Current Year
    Prior Year
    Two Years Ago
    CGS to Net Sales Ratio (%)
    62.09%
    67.77%
    68.51%
    Gross Profit Rate (%)
    37.91%
    32.23%
    31.49%
    Profit Margin (%)
    6.99%
    -0.21%
    2.22%
    Return on Assets
    2.88%
    -0.10%
    1.01%
    Total Asset turnover
    41.13%
    -46.69%
    45.62%
    Return on Total Equity
    48.44%
    -3.34%
    44.93%
    Return on Common Equity
    63.89%
    -72.18%
    -5.89%
    Return on Investments
    2.88%
    -0.10%
    1.01%
    Sales To Fixed Assets Ratio
    0.460
    0.532
    0.512
    EPS - Basic
    3.96
    -1.74
    0.55
    EPS - Diluted
    3.89
    -1.74
    0.55
    Times Interest Earned
    1.57
    0.98
    1.17
    Debt ratio
    0.94
    0.97
    0.92
    Debt / Equity ratio
    15.84
    33.18
    40.68
    Price Earnings Ratio
    10.66
    -28.38
    44.16
    Dividend Payout
    NA
    NA
    NA
    Dividend Yield
    NA
    NA
    NA
    Book Value
    $6.20
    $2.41
    -$9.27
4.
Using elements listed on your company’s income statement, prepare a common size income statement using the following format. (Vertical Analysis Chapter 5)
    Account
    Current Year
     %
    Prior Year
     %
    Two Years Ago
     %
    Segment Revenues:-
     
     
     
     
     
     
    Franchise revenues
     $ 398,539
    37.07%
     $ 377,137
    28.28%
     $ 372,999
    26.36%
    Company resturant sales
     $ 530,984
    49.38%
     $ 815,572
    61.15%
     $ 890,020
    62.91%
    Rental income
     $ 125,960
    11.72%
     $ 124,508
    9.34%
     $ 133,845
    9.46%
    Financing revenues
     $ 19,715
    1.83%
     $ 16,424
    1.23%
     $ 17,899
    1.27%
    Total revenues
     $ 1,075,198
    100.00%
     $ 1,333,641
    100.00%
     $ 1,414,763
    100.00%
     
     
     
     
     
     
     
    Segment Expenses:-
     
     
     
     
     
     
    Franchise expenses
     $ 105,006
    9.77%
     $ 103,505
    7.76%
     $ 102,256
    7.23%
    Company restaurant expenses
     $ 458,443
    42.64%
     $ 699,336
    52.44%
     $ 766,472
    54.18%
    Rental expenses
     $ 98,147
    9.13%
     $ 99,030
    7.43%
     $ 100,201
    7.08%
    Financing expenses
     $ 5,973
    0.56%
     $ 1,969
    0.15%
     $ 370
    0.03%
    Total Segment expenses
     $ 667,569
    62.09%
     $ 903,840
    67.77%
     $ 969,299
    68.51%
     
     
     
     
     
     
     
    Gross segment profit
     $ 407,629
    37.91%
     $ 429,801
    32.23%
     $ 445,464
    31.49%
    General and administrative expenses
     $ 155,822
    14.49%
     $ 160,330
    12.02%
     $ 157,727
    11.15%
    Interest expense
     $ 132,707
    12.34%
     $ 171,537
    12.86%
     $ 186,258
    13.17%
    Impairment and closure charges
     $ 29,865
    2.78%
     $ 4,285
    0.32%
     $ 105,622
    7.47%
    Amortization of intangible assets
     $ 12,300
    1.14%
     $ 12,300
    0.92%
     $ 12,306
    0.87%
    Loss (gain) on extinguishment of debt and temporary equity
     $ 11,159
    1.04%
     $ 107,003
    8.02%
     $ (45,678)
    -3.23%
    Debt modification costs
     $ 4,031
    0.37%
     $ -
    0.00%
     $ -
    0.00%
    Gain on disposal of assets
     $ (43,253)
    -4.02%
     $ (13,574)
    -1.02%
     $ (7,355)
    -0.52%
     
     
     
     
     
     
     
    Income (Loss) before income tax
     $ 104,998
    9.77%
     $ (12,080)
    -0.91%
     $ 36,584
    2.59%
    Provision (Benefit) for income taxes
     $ (29,806)
    -2.77%
     $ 9,292
    0.70%
     $ (5,175)
    -0.37%
     
     
     
     
     
     
     
    Net Income (Loss)
     $ 75,192
    6.99%
     $ (2,788)
    -0.21%
     $ 31,409
    2.22%
    Net Income (Loss) available to common stockholders:-
     
     
     
     
     
     
    Net income (Loss)
     $ 75,192
    6.99%
     $ (2,788)
    -0.21%
     $ 31,409
    2.22%
    Less: Series A Preferred stock dividends
     $ -
    0.00%
     $ (25,927)
    -1.94%
     $ (19,531)
    -1.38%
    Less: Accretion of series B preferred stock
     $ (2,573)
    -0.24%
     $ (2,432)
    -0.18%
     $ (2,291)
    -0.16%
    Less: Net (income) loss allocated to unvested participating restricted stock
     $ (1,886)
    -0.18%
     $ 1,173
    0.09%
     $ (351)
    -0.02%
     
     
     
     
     
     
     
    Net income (Loss) available to common stockholders
     $ 70,733
    6.58%
     $ (29,974)
    -2.25%
     $ 9,236
    0.65%
    Net income (Loss) available to common stockholders (per share):-
     
     
     
     
     
     
     
     
     
     
     
     
     
    Basic
    3.96
     
    -1.74
     
    0.55
     
    Diluted
    3.89
     
    -1.74
     
    0.55
     
    Weighted average shares outstanding:-
     
     
     
     
     
     
    Basic
    17846
     
    17240
     
    16917
     
    Diluted
    18185
     
    17240
     
    16917
     
5.
Using elements listed on your company’s income statement calculate the increase or decrease in dollars and percent between the years using the following format. (Year to Year Change Analysis Chapter 5)
    Account
    Current Year
    Prior Year
    Change in $
     %
    Two Years Ago
    Change in $
     %
    Segment Revenues:-
     
     
     
     
     
     
     
    Franchise revenues
     $ 398,539
     $ 377,137
     $ 21,402
    5.67%
     $ 372,999
     $ 25,540
    6.85%
    Company resturant sales
     $ 530,984
     $ 815,572
     $ (284,588)
    -34.89%
     $ 890,020
     $ (359,036)
    -40.34%
    Rental income
     $ 125,960
     $ 124,508
     $ 1,452
    1.17%
     $ 133,845
     $ (7,885)
    -5.89%
    Financing revenues
     $ 19,715
     $ 16,424
     $ 3,291
    20.04%
     $ 17,899
     $ 1,816
    10.15%
    Total revenues
     $ 1,075,198
     $ 1,333,641
     $ (258,443)
    -19.38%
     $ 1,414,763
     $ (339,565)
    -24.00%
     
     
     
     
     
     
     
     
    Segment Expenses:-
     
     
     
     
     
     
     
    Franchise expenses
     $ 105,006
     $ 103,505
     $ 1,501
    1.45%
     $ 102,256
     $ 2,750
    2.69%
    Company restaurant expenses
     $ 458,443
     $ 699,336
     $ (240,893)
    -34.45%
     $ 766,472
     $ (308,029)
    -40.19%
    Rental expenses
     $ 98,147
     $ 99,030
     $ (883)
    -0.89%
     $ 100,201
     $ (2,054)
    -2.05%
    Financing expenses
     $ 5,973
     $ 1,969
     $ 4,004
    203.35%
     $ 370
     $ 5,603
    1514.32%
    Total Segment expenses
     $ 667,569
     $ 903,840
     $ (236,271)
    -26.14%
     $ 969,299
     $ (301,730)
    -31.13%
     
     
     
     
     
     
     
     
    Gross segment profit
     $ 407,629
     $ 429,801
     $ (22,172)
    -5.16%
     $ 445,464
     $ (37,835)
    -8.49%
    General and administrative expenses
     $ 155,822
     $ 160,330
     $ (4,508)
    -2.81%
     $ 157,727
     $ (1,905)
    -1.21%
    Interest expense
     $ 132,707
     $ 171,537
     $ (38,830)
    -22.64%
     $ 186,258
     $ (53,551)
    -28.75%
    Impairment and closure charges
     $ 29,865
     $ 4,285
     $ 25,580
    596.97%
     $ 105,622
     $ (75,757)
    -71.72%
    Amortization of intangible assets
     $ 12,300
     $ 12,300
     $ -
    0.00%
     $ 12,306
     $ (6)
    -0.05%
    Loss (gain) on extinguishment of debt and temporary equity
     $ 11,159
     $ 107,003
     $ (95,844)
    -89.57%
     $ (45,678)
     $ 56,837
    124.43%
    Debt modification costs
     $ 4,031
     $ -
     $ 4,031
    100.00%
     $ -
     $ 4,031
    100.00%
    Gain on disposal of assets
     $ (43,253)
     $ (13,574)
     $ (29,679)
    218.65%
     $ (7,355)
     $ (35,898)
    -488.08%
     
     
     
     
     
     
     
     
    Income (Loss) before income tax
     $ 104,998
     $ (12,080)
     $ 117,078
    969.19%
     $ 36,584
     $ 68,414
    187.01%
    Provision (Benefit) for income taxes
     $ (29,806)
     $ 9,292
     $ (39,098)
    -420.77%
     $ (5,175)
     $ (24,631)
    -475.96%
     
     
     
     
     
     
     
     
    Net Income (Loss)
     $ 75,192
     $ (2,788)
     $ 77,980
    2796.99%
     $ 31,409
     $ 43,783
    139.40%
    Net Income (Loss) available to common stockholders:-
     
     
     
     
     
     
     
    Net income (Loss)
     $ 75,192
     $ (2,788)
     $ 77,980
    2796.99%
     $ 31,409
     $ 43,783
    139.40%
    Less: Series A Preferred stock dividends
     $ -
     $ (25,927)
     $ 25,927
    100.00%
     $ (19,531)
     $ 19,531
    100.00%
    Less: Accretion of series B preferred stock
     $ (2,573)
     $ (2,432)
     $ (141)
    5.80%
     $ (2,291)
     $ (282)
    -12.31%
    Less: Net (income) loss allocated to unvested participating restricted stock
     $ (1,886)
     $ 1,173
     $ (3,059)
    -260.78%
     $ (351)
     $ (1,535)
    -437.32%
     
     
     
     
     
     
     
     
    Net income (Loss) available to common stockholders
     $ 70,733
     $ (29,974)
     $ 100,707
    335.98%
     $ 9,236
     $ 61,497
    665.84%
    Net income (Loss) available to common stockholders (per share):-
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Basic
    3.96
    -1.74
     $ 6
    327.59%
    0.55
     $ 3
    620.00%
    Diluted
    3.89
    -1.74
     $ 6
    323.56%
    0.55
     $ 3
    607.27%
6.
Using elements listed on your company’s income statement calculate the ratios and amounts using two years prior as the base year (100%) using the following format. Your answers should all be in percentages. (Horizontal Analysis Chapter...