Financial Analysis of Yum Brands

Topics: Yum! Brands, Financial ratio, KFC Pages: 4 (1430 words) Published: March 19, 2013
A Financial Analysis of Yum! Brands, Inc

Restaurants are, and will continue to be, an extremely profitable business. As a result, shareholders who have interest in brands such as McDonalds and Starbucks need not to worry about negative implications for the food giants compared to more risky industries. One company in particular, Yum! Brands (YUM), is another brand investors should become familiar with. Consumers may recognize the more specific stores the company owns such as Taco Bell and Pizza Hut, but investors should realize the sales and earnings growth associated with this organization. In addition, while there are many companies in the restaurant industry, Yum not only rings familiar with consumers like Starbucks, but Yum engenders excellent financial news at a level above its competitors. However, before trying to access these financial statements, it is important to understand more specifics about Yum's business model. According to Reuters, Yum "is a quick service restaurant (QSR) with over 34,000 units in more than 100 countries and territories." These quick service restaurants include consumer favorites such as Taco Bell, Pizza Hut, Long John Silver's, and KFC. Whether the operating segment sells pizza or chicken, "Yum develops, operates, franchises and licenses a worldwide system of restaurants, which prepare, package and sell a menu of food items." As each of these fast-food places is obvious to most readers in America, it is also quite interesting that over 100 countries are familiar with these names as well. In fact, segments like KFC were actually introduced in many markets like China before more obvious competitors like McDonalds. Since fast food is generally considered an inelastic, or non-cyclical, good, even during times of economic uncertainty, Yum will prosper. While most of its food is relatively cheap compared to rivals such as Brinker and Darden, consumers will still flock to Yum restaurants in similar volume during any stage of the...
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