Ratio Analysis of the Bgmt 1101 Company

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Bgmt 1101

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Table of Contents
Ratio analysis.............................................................................................................................3
Additional information to make investment decision................................................................4
Recommendation........................................................................................................................4
References..................................................................................................................................6
Appendix....................................................................................................................................7

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Ratio analysis
The calculation for the ratios shall be performed so that the required results can be obtained
and there will be a proper evaluation which will be made. The information from the accounts
of the company is taken into use for the same.
Particulars Formula Yum
Brands
Ruth
Hospitality
Dominos
Net income Total Revenue - Total Expenses 17630000
00
51659000 57168900
0
% Return on
Sales
Net Income/Total Revenue 31.00% 11.42% 16.65%
Current Ratio Current Assets/Current
Liabilities
0.93 0.38 1.49
$ Stockholder
Equity
Total Assets-Total Liabilities -
79260000
00
90132000 -
30399210
00
% Return on
Equity
Net Income/Stockholder Equity -22.24% 57.31% -18.81%
% Debt to Equity
Ratio
Total Liabilities/Stockholder
Equity
-152.11% 182.49% -129.85%
Earnings per
Share
Net Income/the Number of
Shares of Stock
5.83 1.80 13.98
The ratio calculation is made and in the case of Yum brands, it can be noted that the amount
of equity that has been identified is a negative amount. This shows the excess of debts for the
company which is not good in the long run and with the negative amount, there is no equity
that is involved (Delen et al., 2013). The net income which is made comprises 31% of the
sales which is made. The current ratio is at 0.93 which is very low and due to these issues
will be faced with meeting all the obligations which will be arising. The total amount of
liabilities is far higher than the equity and due to that, the debt to equity ratio is 152.11%. The
earning which is made by the company on each share is identified at 5.83 which shows its
good earnings and will help it in meeting the further requirements and paying the dividend to
the shareholders.
For Ruth hospitality, the net income has been ascertained at $51659000 which is forming the
11.42% of the total revenues which are made. The liquidity of the company is not maintained
adequately and that is at the point of 0.38. The standard for the current ratio is set at 2 but the
same is not fulfilled and the ratio is below it to a great level. The return which is provided on