Question

Analyze Yum! Brands by segment Yum! Brands, Inc. (YUM) is a worldwide operator and franchisor of fast-food restaurants, under the familiar brands of KFC, Pizza Hut, and Taco Bell. Segment revenues, operating income, and depreciation and amortization expense for Yum!'s operating segments are provided for a recent year as follows (in millions): Segment Sales Operating Income Depreciation and Amortization Expense $173 36 KFC Pizza Hut Taco Bell $3,232 1,111 2,025 $874 370 593 a. Prepare a vertical analysis of the sales as a percent of total sales for the three segments. Round percentages to the nearest whole percent. Segment Revenue Percentage of Total KFC Pizza Hut Taco Bell Total $ Which segment has the greatest percentage of total sales? b. Determine the earnings before interest, taxes, depreciation, and amortization (EBITDA) for the three segments. For those boxes in which you must enter subtractive or negative numbers use a minus sign. Segment Operating Income Depreciation and Amortization Expense EBITDA KFC Pizza Hut Taco Bell c. Determine the EBITDA as a percent of sales (EBITDA margin) for the three segments. Round percentages to the nearest whole percent.

Answer 1

Requirement A Segment Revenue Percentage of Total KFC Pizza Hut Taco Bell 3,232.00 1,111.00 2,025.00 51% 17% 32% Total 6,368.00 100% KFC Segment Has the Greatest Percentage of Total Sales Requirement B Operating Income Segment KFC Pizza Hut Taco Bell Depreciation and Amortization Expense EBITDA $ 173.00 $1,047.00 $ 36.00 $ 406.00 $ 91.00 $ 684.00 874.00 370.00 593.00 $ *EBITDA - Operating Income + Depreciation and Amortization Expense Requirement C EBITDA as a Percentage of Segment Sales 32% Segment KFC Pizza Hut Taco Bell Calculations 1047/3232 406/1111 684/2025 37% 34% Requirement D Option (1) The Three Restaruant segments produce EBITDA Margin above 30% which would be considered strong