Accounting & Financial Report: Restaurant Brand Financial Analysis

This report provides a financial analysis of three restaurant brand companies: Yum Brands Inc., Panera Bread Company, and Starbucks Corporation. It utilizes various financial reporting tools and techniques to assess their financial position and performance, drawing data from their 2017 annual reports and other reliable sources. The analysis covers profitability, solvency, and liquidity, with a comparative examination of key financial ratios and cash flow statements. The report highlights Panera Bread's strong profitability but identifies inconsistencies in its cash generation. The analysis emphasizes the importance of accurate data selection and appropriate analytical tools for effective financial statement analysis, aiding stakeholders in informed decision-making. The document is contributed by a student and available on Desklib for educational purposes.

Running head: ACCOUNTING AND FINANCIAL REPORTING
Accounting and Financial Reporting
Name of the Student:
Name of the University:
Author’s Note:

2ACCOUNTING AND FINANCIAL REPORTING
Table of Contents
Part (b):.......................................................................................................................................3
Part (c):.......................................................................................................................................4
Learning outcome from the whole analysis:..............................................................................6
References:.................................................................................................................................7
Appendix:...................................................................................................................................8

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Part (b):
Three restaurant brand companies have been selected for an analysis if their financial
position and performance. There are various tools and techniques of financial reporting and
financial statement analysis. In the previous part of this report the financial performance and
financial position of Yum Brand Inc, Panera Bread and Starbucks have been analysed and
illustrated. In analysing their financial statement various ratios have been used and different
charts and graphs have been used for a better presentation. For conducting such an analysis
successfully various information has been taken from the website of the companies and from
their annual reports. To project their financial strength their net assets have been analysed
including the inventory for knowing their current deliverability of products. Their accounting
systems related to assets and inventory have also been analysed in the previous parts of this
report.
To analyse their profitability, their net profit have been shorted out from their 2017
annual report and a comparative analysis has been done and it can be observed that, in terms
of net profit the Panera Bread is having the highest amount of net profit by the year 2017
(Panera Bread Company, 2019). On the other hand, there has been a discontinuation of
operation of Starbucks in that year.
To project their solvency and liquidity, various debt ratios and liquidity parameters
have been analysed with graphical presentation. Therefore, the data used for this analysis is
adequate and can show a true result of the analysis. It can be observed from the liquidity
analysis of the companies that, the Panera Bread Company was having the lowest risk and
highest liquidity and was the best financial performer of the three companies. Therefore, it
can be observed from the whole analysis and presentation that, various financial statement
analysis tools have been used for analysis of the financial data for the selected three

4ACCOUNTING AND FINANCIAL REPORTING
companies. As the data are taken from their annual reports hence, those are reliable and can
be accepted for various decision making purposes.
Financial statement analysis is done for the purpose of various decisions making.
There are various internal and external stakeholder of every company. They are having
various needs and interest from the company. They need to take various important decisions
from time to time. For such decision making financial data and information is required.
Financial statement analysis serves that perspective of the decision making of the
stakeholders. There are various other sources of financial data, such as respective stock
exchanges where the company is listed and the respective market in which the company is
operating. From the stock exchanges the data relating to the stock price movement of the
company or the fluctuation if the stock prices of the companies can be known. From the
market, data relating to the demand and brand values of the company can be known. To
analyse the solvency in a deeper way, information can be taken from the creditors of the
company, bankers of the company or the lenders of the company.
Therefore, collection of data form financial statement analysis is having a major role
on the outcomes and effectiveness of the analysis. If the data considered for such an analysis
is not adequate and reliable and re not free from errors, then the result of such analysis would
not be serving the intended purposes. In this report the financial data and information are
taken from the annual report of the companies, Stock exchanges and market information,
which are reliable and can give an effective result.
Part (c):
From the cash flow statement of the companies, information about the generation and
utilisation of cash can be known. Taking the information from their 2017 annual report the

5ACCOUNTING AND FINANCIAL REPORTING
net cash flows from three heads of activities and the net change in cash position can be shown
in the following table
It can be observed that, though the Panera bread company is having a good
profitability and solvency over the last couple of years, but an inconsistency is there in cash
generation for the company. It can be observed from the above table, while the other two
companies are having a huge cash generation from their operating activities, Panera Bread
company is having only $75.76 million of cash generation from their operating activities
(Panera Bread Company, 2019). In terms of operating activities, the Starbucks is performing
well and having $4,174.30 million of cash generation from their operating activities. In terms
cash flow from investing activities, it can be observed that, the Panera Bread Company has
invested certain amount off fund in their fixed assets while the other two companies have
disinvested some amount of fund. The following chart can present it in a better way.
Cash Flow from operating Activities
Net Cash Used/Provided by Investing
Activities
Net Cash used by financing activities
Net Change In Cash
-4,000.00 -2,000.00 - 2,000.00 4,000.00 6,000.00 8,000.00 10,000.00
Starbucks
Panera Bread
Yum Brands

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Despite spending a lot of amount in financing activities the Yum Brands is still able to
generate $707 in net and the Starbucks is able to generate $8025.30, on the other hand the net
cash generation of the Panera Bread is only $47.83.Hence, it can be concluded that, the
Panera Bread Company is having a problem in their cash flow (Panera Bread Company, 2019).
Learning outcome from the whole analysis:
Financial statement analysis is a process of analysing the financial data and
information of a company to interpret the financial performance and financial position of a
company. Various tools and techniques can be applied for such a financial statement analysis.
It helps in understanding the financial and operational performance of the company and to
make investment and other decision related with the company. It can be learned from the
whole analysis, that selection of efficient and correct data for financial statement analysis is
very important and application of necessary analysis tools and techniques can give the best
result of such analysis. One must be using those ratios and parameters which will serve their
information need and decision making purposes better.

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References:
Panera Bread Company. (2019, MAy 10). Retrieved from www.sec.gov:
https://www.sec.gov/Archives/edgar/data/724606/000072460616000042/
a2015122910k.htm
Yum Brands Inc. (2019, May 10). Retrieved from ast10k.com: https://last10k.com/sec-
filings/yum/0001041061-19-000010.htm#link_fullReport
Starbucks Corporation. (2019, May 10). Retrieved from
https://www.sec.gov/Archives/edgar/data/829224/000082922417000049/sbux-
1012017x10xk.htm

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Appendix:

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