Financial Statement Analysis
Financial Statement Analysis
On the following paper I will be computing, analyzing the following ratios: Earnings per share, return on assets, Current ratio, Times interest earned, Asset turnover, Debt to total assets, Current cash debt coverage, and Free cash, for the years 2002, 2003, and Landry 's Restaurant Financial performance for those 2 years. By computing the ratios it will give us a better understanding on the overall Landry 's Restaurant 's financial performance for the years 2002, and 2003.
2003
2002
A) Earnings per Share
$1.66
$1.60
B) Return on Assets
4.51%
5.12%
C) Current Ratio
0.76
0.62
D) Times Interest Earned
7.00
13.04
E) Asset Turnover
1.09
1.10
F) Debt-to-Total Assets
0.4518
0.3922
G) Current Cash Debt Coverage
0.762
0.753
h) Cash Debt Coverage Ratio
0.281
0.337
I) Free Cash Flow
($23,211)
N/A
Sales increased from $ 41.5 million in 2002 to 45.9 million in 2003. However, Landry 's net profit margin declined from 4.6% in 2002 to 4.2% in 2003. This decrease in net profit margin is primarily due to a decline in Landry 's gross profit percentage. Gross profit percentage is the amount of profit after deducting the cost of Landry 's operations. This means Landry 's cost of providing restaurant services (food and services costs) increased than Landry 's sales. This could be due to Landry 's opening new restaurants which incur full operating costs but the new restaurants need to build sales.
Based on the analysis that was perform on Landry 's Restaurant, the company 's liquidity ratios are improving as can be seen from the increase in current ratio and the increase in Current Cash Debt Coverage. The Company 's profitability seems to be declining as can be seen from the decrease in the ROA although the EPS has increased. The company 's solvencies seem to be declining as evidenced by the decrease in Times Interest Earned. the company 's ability to generate cash for future capital expenditures cannot be judged
On the following paper I will be computing, analyzing the following ratios: Earnings per share, return on assets, Current ratio, Times interest earned, Asset turnover, Debt to total assets, Current cash debt coverage, and Free cash, for the years 2002, 2003, and Landry 's Restaurant Financial performance for those 2 years. By computing the ratios it will give us a better understanding on the overall Landry 's Restaurant 's financial performance for the years 2002, and 2003.
2003
2002
A) Earnings per Share
$1.66
$1.60
B) Return on Assets
4.51%
5.12%
C) Current Ratio
0.76
0.62
D) Times Interest Earned
7.00
13.04
E) Asset Turnover
1.09
1.10
F) Debt-to-Total Assets
0.4518
0.3922
G) Current Cash Debt Coverage
0.762
0.753
h) Cash Debt Coverage Ratio
0.281
0.337
I) Free Cash Flow
($23,211)
N/A
Sales increased from $ 41.5 million in 2002 to 45.9 million in 2003. However, Landry 's net profit margin declined from 4.6% in 2002 to 4.2% in 2003. This decrease in net profit margin is primarily due to a decline in Landry 's gross profit percentage. Gross profit percentage is the amount of profit after deducting the cost of Landry 's operations. This means Landry 's cost of providing restaurant services (food and services costs) increased than Landry 's sales. This could be due to Landry 's opening new restaurants which incur full operating costs but the new restaurants need to build sales.
Based on the analysis that was perform on Landry 's Restaurant, the company 's liquidity ratios are improving as can be seen from the increase in current ratio and the increase in Current Cash Debt Coverage. The Company 's profitability seems to be declining as can be seen from the decrease in the ROA although the EPS has increased. The company 's solvencies seem to be declining as evidenced by the decrease in Times Interest Earned. the company 's ability to generate cash for future capital expenditures cannot be judged
References: Landry 's Restaurant Inc.�(2005).�Laundry 's Seafood Restaurant.�Retrieved May�16, 2009, from http://www.landrysrestaurants.com/pages/about/pg_history.htm Horngren/ Harrison, Charles/Walter (2008). Financial Accounting Managerial (6th ed.). Upper Saddle River, New Jersey: Pearson.