Financial Analysis and Interpretation of KFC and Burger King

This presentation provides a detailed financial analysis and interpretation of KFC and Burger King, including profitability and investment ratios for the years 2014-2017. The profitability ratios include gross profit margin, net profit margin, return on capital employed, and return on shareholder's fund. The investment ratios include dividend payout ratio, dividend cover ratio, dividend yield ratio, earnings per share, and price earning ratio. The presentation also includes a brief overview of the business sector and main competitors of KFC.

Financial analysis and interpretation
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Business sector –
KFC is the fast food brand that is specialized in chicken. It has
more than 19500 units all over 115 nations and territories. It is
the 2nd largest restaurant chain in world after McDonald. Main
menus of KFC include fried chicken and side dishes include
chicken sandwiches, grilled chicken, desserts, hot wings and
chicken strips.
Main competitors –
The main competitor of KFC is Burger King. Both the brands
lose owing to the fact that they serve the heart attacks in bag.
However both the companies can be compared on the following
aspects –
Price – if the prices of the foods are considered then the prices
of both the brands are almost close in terms of the set meals
Innovation – if the innovation aspect is taken into
consideration burger king is better as compared to KFC
Variety – in variety aspect, KFC is the the winner

Ratio 2017 2016 2015 2014
KFC
Gross profit margin 49.74 45.11 43.49 27.09
Net profit margin 22.42 25.85 19.99 7.69
Return on capital employed 72.68 40.56 28.75 22.96
Return on shareholder's fund -21.16 -29.26 133.44 65.52
Burger king
Gross profit margin 59.57 58.34 55.35 86.95
Net profit margin 26.99 23.06 12.63 -22.46
Return on capital employed 8.96 9.30 6.90 2.69
Return on shareholder’s fund 13.73 9.91 3.57 -9.19
Profitability ratio

Ratio 2017 2016 2015 2014
KFC
Dividend payout ratio 31.04 45.28 56.90 65.52
Dividend cover ratio 322.12 220.83 175.75 152.62
Dividend yield ratio 1.07 2.68 3.18 2.73
Earnings per share 3.86 2.58 2.13 2.37
Price earning ratio 21.88 25.05 25.67 24.14
Burger king
Dividend payout ratio 15.03 15.15 17.41 -39.21
Dividend cover ratio 665.21 660.15 574.30 -255.02
Dividend yield ratio 1.38 1.12 1.05 0.77
Earnings per share 2.64 1.48 0.51 -1.16
Price earning ratio 21.44 37.29 82.20 -33.62
Investment ratio