Question

For each year listed in Exhibit 1 (2009 – 2014), calculate the following ratios:

• Bakery-Café Cost of Sales (formula: Bakery-Café Expenses/Bakery-Café Sales)
• Operating Profit Margin (Operating Profit/Total Revenues)
• G&A as a percent of Total Revenues
• Net Income Margin (Net Income to shareholders/Total Revenues)
• Return on Equity (Net Income to Shareholders/Total Stockholder’s Equity)
• Return on Assets (Net Income to Shareholders/Total Assets)
• Debt-to-Assets (Total Liabilities/Total Assets)
• Debt-to-Equity (Total Liabilities/Total Stockholder’s Equity)
• Current Ratio (Current Assets/Current Liabilities)

Note: 2010 is missing from the case and therefore ratios are not required for that year.

income Statement Data 2012 2009 3 $1.153,255 2 7 Fresh dough and other product sales to franchisees Bakery-Café expenses: 2 8 8 2 Total bakery-Café expenses Fresh dough and other product cost of sales to franchisees Depreciation and amortization General and administrative expenses 7 Other (income) expense, net 3 Less net income (loss) attributable to noncontrolling interest Net income to shareholders 8 2 Weighted average shares outstanding 2 2 9 5 2 2 2 Balance Sheet Data Net cash provided by operating activities Net cash used in investing activities Net cash (used in) provided by financing activities Net (decrease) increase in cash and cash equivalents 5

Answer 1

Analysis of Ratios
	Description	2014	2013	2012	2011	2009
a	Bakery café Sales	2,230,370	2,108,908	1,879,280	1,592,951	1,153,255
b	Bakery café expenses	1,830,109	1,695,434	1,498,848	1,285,939	959,586
c	Operating Profit	275,943	309,756	282,870	220,259	140,897
d	Total Revenue	2,529,195	2,385,002	2,130,057	1,822,032	1,353,494
e	General & Administrative expenses	138,060	123,335	117,932	113,083	83,169
f	Net Income to shareholders	179,293	196,169	173,448	135,952	86,050
g	Total Shareholders Equity	736,184	699,892	821,919	655,076	597,036
h	Total Assets	1,390,902	1,180,862	1,268,163	1,027,322	837,165
i	Total Liabilities	654,718	177,645	168,704	372,246	240,129
j	Current Assets	406,384	302,716	478,842	353,119	322,084
k	Current Assets(including Cash & Cash equivalent)	602,877	427,961	775,983	575,759	568,484
l	Current Liabilities	352,712	303,325	277,540	238334	142,559
	Bakery-Café Cost of Sales(b/a)	0.8205	0.8039	0.7976	0.8073	0.8321
	Operating Profit Margin(c/d)	0.1091	0.1299	0.1328	0.1209	0.1041
	G&A as a percent of Total Revenues(e/d)	0.0546	0.0517	0.0554	0.0621	0.0614
	Net Income Margin(f/d)	0.0709	0.0823	0.0814	0.0746	0.0636
	Return on Equity(f/g)	0.2435	0.2803	0.2110	0.2075	0.1441
	Return on Assets(f/h)	0.1289	0.1661	0.1368	0.1323	0.1028
	Debt-to-Assets(i/h)	0.4707	0.1504	0.1330	0.3623	0.2868
	Debt-to-Equity(i/g)	0.8893	0.2538	0.2053	0.5682	0.4022
	Current Ratio,not incuding cash(j/l)	1.1522	0.9980	1.7253	1.4816	2.2593
	Current Ratio, including cash(k/l)	1.7093	1.4109	2.7959	2.4158	3.9877