Paner Bread External Analysis

Topics: Revenue, Income statement, Bread Pages: 7 (1906 words) Published: November 11, 2012
Final Case Analysis|
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Table of Contents
How well is Panera Bread’s Present Strategy Working?2
Financial Analysis:2
Sales Growth3
SWOT Analysis4
What is the Company’s Relative Cost Position/Value Chain Analysis?6
Cost advantage versus competitors6
Value Chain Analysis6
What is the Company’s Competitive Position in Relation to Rivals?7
What are the important issues/problems facing the company?8
Lawsuits/Health concerns8

How well is Panera Bread’s Present Strategy Working?
Financial Analysis:
Panera Bread’s financials, for the three business segments: company-operated bakery-cafes, franchise operations, and the operations of the regional facilities that supply fresh dough and other products are exceptionally notable over the previous years, 2002-2010. Total revenues has increased annual from 2002 to 2010. In 2002 there was $282,225 total revenue and ending in 2010 there was $1,542,489 total revenue. Revenues multiplied by nearly four between 2002 and 2003; from there it kept a steady pace upward. Revenues were not growing solitary, net income was growing by the year, as well. By 2010 there was total revenue of $1,542,489 and $111,866 net income to shareholders compared to $282,225 and $21,300 respectively in 2002. Net profit margin was 7.55% in 2002, dropped below 5.5% in 2007 and 2008, and was back up to 7.25% in 2010. Earnings per share, basic and diluted, increased over time from 2002 to 2010 without decreasing. Beginning with $0.74 basic in 2002 and ending with $3.65 in 2010, there was a 493.24% increase in earnings per share for that eight year stretch.

Further than net income and revenues, Panera has added to current assets. In 2002 the amount was $59,262 and in 2010 it was $330,685. Stockholders’ equity cultivated from a mere $151,503 to $595,608. A $191,311 increase in net cash provided by operating activities from 2002 to 2010 was achieved.

In addition to the persistent increase in Panera Breads financials, they will continue to do well in 2011. Within the first six months there were many increases. Increases of 18 percent lead sales revenue to $873.2 million. There was a 30 percent increase in net income, and diluted earnings per share went from $1.67 to $2.27; an increase of 36 percent. Sales in the 2011 first quarter and second quarter correspondingly averaged 3.3 and 4.4 percent at existing company-owned bakery-cafes, 3.4 and 3.6 percent at existing franchise-operated bakery-cafes, and 3.3 and 3.9 percent at existing bakery-cafes system wide. Since January 1, 2011 the system wide total of bakery-cafes extended to 1,493 locations, from the net of 40 latest openings.

Additional indication that the strategy for Panera Bread is flourishing can be provided by examining a few key ratios. To observe liquidity, examine the current ratio. A current ratio should be over 1.0 to be acceptable. Panera bread is operating with a current ratio of 1.56 in 2010. A current ratio over 1.5 offers support to meet current liabilities with ease. Credit rating can be studied by inspecting the debt to equity ratio. A decent number is .33. Besides the year 2002, they are above .33 and they show strength with competitors and cost attractiveness. The larger percent in 2010 means they can cover interest payments and taxes and transfer more money to the bottom line. As seen in Table 1 below, Panera’s ratios...
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