California Kitchen Case Study

Question With established locations in both Canada and the U.S., the Earls Kitchen and Bar locations are known for their open, urban contemporary atmosphere. In today’s hypercompetitive market in the upper casual restaurant segment, Earls Kitchen and Bar must continually expand and differentiate itself. Currently, they must decide whether they should have a consistent napkin offering in both the U.S. and Canada or remain different. Context Macroeconomic Overview Background of Upper Casual Restaurant Segment Economic Issues Economic, social and environmental issues are the main factors influencing the upper casual restaurant segment. In the U.S., it is predicted there will be a 2 percent decline for full-service restaurants, resulting in no-growth traffic for the industry (QSR magazine, 2017).

Issuing additional debt to finance the company expansion would worsen the company’s debt ratio as it is already more than average. The company envisions to be profitable by raising capital from existing stockholders by issuing common stock through rights offering.

This paper provides a summary of our analysis of the data obtained for 60 Crusty Dough Pizza Company restaurants. We compared 16 pizza store characteristics to monthly profit in order to determine the best indicators of success. The results of this analysis may be used to determine the store services and attributes that have the most bearing on profitably.

Cutthroat Kitchen, which aired on Food Network on August 11, 2013, has many examples of obedience to authority and fear. Claire Curtis who teaches in the department of political science, discusses fear and how it affects humans in her article. Michael Ray and Homer Spence also discuss fear from two separate views in their articles. Michael Ray is a psychologist with extensive experience in marketing communication. The television show Cutthroat Kitchen raises the question as to why people use fear to gain authority.

operates 25 years’ history. Compared to Chuck E Cheese, Inc. and California Pizza Kitchen, Inc.,

WLI executives had two options of pricing. First option was to position Niconil in the same price range as cigarettes. In other words, the expected retail price per unit would be £32.00. On the other hand, second price option was to place Niconil in the premium price range. Under this second option, the expected retail price per unit would be £60.00. Breakeven analysis would be very helpful for examining these two options.

similar to that of share buyback, the number of new shares outstanding will reduce; thus,

To perform a break-even analysis, we have made the following assumptions: (a) retail margin= 60%, (b) the additional fixed cost of production per flavor, including advertising, bottling run and sundries, is $10 million and this is assumed to be an annual cost, except the bottling run, (c) a conservative estimate of percentage share of market figure is derived by multiplying the market segment percentages, as well as the age segment percentage for the category > 40 yrs. The percentage = 74% x 62% x 85% x 40% = 16%. We first determine the retail

Shares outstanding decrease as the firm takes on more debt. The reason being is that the firm buys back shares with the newly acquired cash from issuing debt.

The effect of financial leverage on the cost of equity is prevalent in the Modigliani-Miller capital structure theory. Since the financial leverage increases the cost of equity, it can be considered one of the disadvantages of borrowing. As shown in Appendix A, the cost of equity, at each debt to capital ratio, increases by 0.1% as the financial leverage increases by 10%. With a higher

There are two ways of increasing capital, (1) using debt and (2) issuing new shares. For profitable companies sometimes it is cheaper to use debt instead of issuing new shares since cost of debt is tax shielded. In this case company didn’t have any debt in past which means less default risk, it will affect total value in a positive way. It will decrease the taxes paid and increase net income, accordingly share values.

La Stella Ranch is a project with a very specific need regarding its function. It was conceived as a space to breed Spanish Horses and share the experience and passion with clients and friends.

Issuing a debt is associated with signaling. According to pecking theory a firm issues debt if it has run out of internal investment which is not a very good sign. From the shareholders perspective this (recapitalization- repurchase of shares) will help in the increase of the value of the stock making them believe that the stock is undervalued.

A company's break-even point is the amount of sales or revenues that it must generate in order to equal its expenses. In other words, it is the point at which the company neither makes a profit nor suffers a loss. Calculating the break-even point (through break-even analysis) can provide a simple, yet powerful quantitative tool for managers. In its simplest form, break-even analysis provides insight into whether or not revenue from a product or service has the ability to cover the relevant costs of production of that product or service. Managers can use this information in making a wide range of business decisions, including setting prices, preparing competitive bids, and applying for loans.

Debt is a lower cost source of funds and allows a higher return to the equity investors by leveraging their money. In addition, the company can deduct the interest paid on the debt from their income and thus reduce the tax burden. With an increase of future corporate tax from 30.8% to 40%, it would be beneficial for the firm to deduct interest payments to pay fewer taxes. Debt greatly reduces the role of integrated enterprise cost of capital. Therefore, it can increase earnings per share and its stock value by improving the proportion of corporate debt appropriately, which assumes a crucial role of financial leverage. Enterprises financial leverage of funds has a magnifying affect, when the business uses the liabilities, the effects of financial leverage will show. However, debt is not always excellent, and we should firstly analyze whether the profitability of raising the funds for capital is greater than the interest rate. If it is so the use of debt will substantially increase their