California Kitchen Case Study

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.

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

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

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.

The DC Central Kitchen is trying to solve the issue of food waste. Robert Egger founded this organization from past experiences of volunteering to help problems like hunger and homelessness. “DC Central Kitchen’s mission is to use food as a tool to strengthen bodies, empower minds, and build communities. DC Central Kitchen is committed to getting students excited about eating their vegetables.” They “transform 3,000 pounds of otherwise wasted food into 5,000 healthy meals.” The meals are cooked by chefs and not pre-packaged or canned goods and they distribute the food to 80 partner agencies that consist of homeless shelters, rehabilitation centers and afterschool programs. Last year they recovered 743,885 pounds of food from grocery stores

The pizza market can be very lucrative, therefore it is very competitive. There are low barriers to entry for this market because there is

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.

Da Kitchen has become famous for its creatively diverse cuisine with an emphasis on traditional Hawaiian food. The menu incorporates both traditional classic Local and Hawaiian favorites, which is inspired by the different ethnic groups established in the islands of Hawaii. The restaurant brings good local food, big portions with reasonable prices to Maui. The menu is innovative and is always up to date on the latest trends and technology, including Gluten Free selections. Favorites include Hawaiian Plate, Mahi Mahi Fish Tempura, Pulehu Grilled Steaks, fresh Fish & Seafood, Pastas, Salads and a different variety of other local plate lunch favorites like Teriyaki Chicken, Chicken Katsu and Loco Moco. Da Kitchen was honored to cook at the Inaugural

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

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.

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.

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.

This recommendation report is being written as requested by the CEO. Upon conducting investigation, we found that many problem areas that concern the CEO existed in Kitchen Best. The purpose of this report is to identify those major problem areas in Kitchen Best. Once the problems are discussed, recommendations will be provided to solve one problem, based on what is seen to be the problem needing urgent attention.