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Analysis on Burger King Worldwide Inc Essay

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Analysis on Burger King Worldwide Inc. (BKW) Burger King (BKW) is the second largest fast food hamburger chain in the world which was founded in 1954; it operates in over 12,600 locations serving over 11 million customers daily in 83 countries and territories worldwide. About 95 percent of Burger King Restaurants are owned and operated by independent franchisees, many of them family-owned operations that have been in business for decades. This company became a publically traded company in this year June 20 2012. Therefore, only current year data will be presented in this report. Price-Earnings ratio In general, a high Price Earnings Ratio recommends that investors expect higher earnings growth in the future relative to companies …show more content…

The return on Equity measures the amount of profit that a company generates through the use of shareholders’ equity. The table below shows ROE of the company that 7.06 percent which is relatively lower than average ROE in the sector. Hence, weak ability to generate cash flows internally. Moreover, ROA is low; it implies that the company is carrying high debt amount. Return on Invested Capital ratio is similar to the return on equity calculation; however, it includes long term debt as part of the leverage. As we see ROIC is greater than weighted average cost of capital (WACC), which are 5.0 percent, and 4.20 percent respectively. Thus, the company will be raising shareholders’ value. A profit margin is also useful when comparing companies in similar sectors. A higher profit margins reflect a more profitable company which has control over its costs compared to its competitors. According to the graphs below, net profit margin is 3.77 percent which means the company has a net income of $0.0377 for each dollar of sales. Comparing with average net profit margin, BKW has 3.43% lower than average competitors sectors. Therefore, the BKW has relatively low ROA, ROE, and Profit Margins. However, the company has higher ROIC than WACC. Probably, the company spent lots of maintenance cost to maintain the corporation. It is new to stock market; it might have potential to become a larger corporation. Regression model for BKW The useful

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