Corporate financial analysis of BJ’s Restaurant and Brewhouse.
BUS401: Principles of Finance
Instructor: Kathleen Colquitt
Loren J. Deitz
27 February 2017
Table of Contents
Introduction and brief history of BJ’s……………………………………………………… 1
Financial statements review ……………………………………………………………….. 1 Income statement ……………………………………………………………………… 2 Balance sheet ………………………………………………………………………….. 2 Statement of cash flow .....…………………………………………………………….. 2
Pro-Forma of projected financial statements ……………………………………………… 5 Income statement ……………………………………………………………………... 5 Balance sheet ………………………………………………………………………….. 6
Ratio Analysis for 2015 …………………………………………………………………... 8 Liquidity ………………………………………………………………………………. 8 Financial Leverage
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It is common to view share price, annual reports, or any bit of information that you can get your hands on in order to gain a clear picture before you invest. The report you are about to read will discuss the financial aspects of BJ’s Restaurant and Brewhouse in order to make a recommendation on whether to or not invest in the company.
Financial statements review The Financial statement review is important to view as they are the way in which a buisness communicates with its shareholders. We will cover the “three primary accounting statements: the income statement, the balance sheet, and the statement of cash flows.” (Hickman, Byrd, & McPherson 2013) We will use these three statements from BJ’s to help get a more detailed picture of where they are financially. Let’s start with the income statement.
Income statement BJ’s sales for fiscal year 2015 were $919.6 million which is an 8.8% increase over fiscal year 2014. This was in part fueled by the addition of new stores and a sales growth of 1.7%. The net income for fiscal year was $43.2 million, a 48% increase. Income per share rose to $1.65 a gain of 60%. (Annual reports, 2016) These number show that the company is growing and its aggressive marketing and expansion plans are working in their favor. The craft beer and good food have made sure that people are coming in, coming back, and spreading the word that this is a great place
Capital Structure. Boston Beer Company is financed almost entirely by shareholder’s equity. The company only had one note payable which was set in June 2012. The note payable is a grant to improve road traffic of the company’s Pennsylvania Brewery. As of December 27, 2014, the total debt, including notes payable, current portion of long-term debt, and long-term debt, was $583,000. According to the company’s balance sheet, as of the end of fiscal year 2014, there were 13,069,730 shares of outstanding common stock, and the price of the stock was $295.74. Thus, the market value of shareholder’s equity was $3,865,241,950 (Boston Beer Co. Inc. and YCharts). The capital structure of Boston Beer is 0.015% debt and 99.985% equity.
There are four major financial statements that investors, creditors, accountants, CEO’s, and the like study when looking at the financial
When you’re looking at the income statement, you can get information about profitability for a particular period. This is also called the profit and loss statement. The income statement is composed of both income and expenses. This statement can be used to deduct expenses from income and report either a net profit or net loss for that period. This statement will deduct all expenses from income and then report your net profit or net loss for that period. This will allow the business owner to determine if the business is bringing in a good amount of revenue to make a profit. The cash flow statement shows the movement in cash and balance over period. The cash flow can vary depending on the operating activities, investing and financing activities. This statement provides one business owner with insight to the company’s liquidity which is vital to the growth of the business. Reinvesting in business is very important, looking at the statement of retained earnings will tell a business owner how much were reinvested in the company. After profitable period, every big business has to give some of its profits to stockholders, and keep the rest amount as retained earnings. Out of all statements, retaining statement is important to companies that sells stocks to the public. This statement can also provide you with assets and liabilities information. These informations can be used to assess the financial health of your business. The results of a balance sheet will help the business owners to show the risk of liquidity and credit. Looking at these information you can measure trends and relationships to show where in the areas you can improve. These can also be compared to similar companies to show how the business measures up to leading competitors (Ali, 2010). In summary, the financial statements can provide a business owner
In J.B Hunt, the transaction value has been increased by 1.5% to 2456.7 million for 2014 whilst group revenue increased by 1.2% by 2234.2 million. Likewise, Group increased by 1.1% to 2789.1 million in 2015 and Group revenue increased by 0.3% to 2256 million. These are the sales and revenue history of J.B Hunt. Instead of a highly promoted marketplace, they focused on full price sales and minimized the number of promotions.
2. (TCO 2) What are the four basic financial statements? Describe the balance sheet, and explain why it is important
Almost sixty-four percent of its stock holders held are institutions. Places such as, Bank of America, Northern Trust Corp, Wellington Management Co and many others that are interested in this company’s growth. Since opening in the middle of 1960’s, McDonald’s any one can recognize its trademark golden arches. We as Americans cannot turn a street corner without seeing a different McDonalds down the road. They are located everywhere, but that just means more profit for the company and its stockholders. The company owns and leases out real estate primarily in connection with its restaurant business. It generally owns the land and buildings or secures out long-term leases for the restaurant sites.
A financial analysis will be conducted on Lowe’s Corporation (Low). I will focus on finance-related entities, ratios and how the company is performing. There will be several ratios discussed based on their relevancy to the company’s current financial conditions.
Several attempts have been made by Boston Beer Company to continue on a growth streak but not all attempts have been successful. The main goals for Boston Beer Company are to increase revenue and continue growing in the industry. Boston Beer Company has had trouble growing as barriers of entry are low and competition is high. Even though the market has seen a slight upturn, however Boston Beer’s founder Jim Koch elaborates on the company’s dissatisfaction, “We are disappointed with our depletion trends in 2016, which have remained weak so far in 2017. These trends are affected by the general softening of the craft-beer category and cider category and a more challenging retail environment with a lot of new options for our drinkers”. (https://www.fool.com/investing/2017/02/22/boston-beer-finds-growth-the-hard-way.aspx)
Financial statements of the company are significant for the investors who would like to venture into the business operation. It gives them the insight whether the business is making profits or it is doomed to fail;
Anheuser-Busch has been a publicly traded company since 1875 and today is still a staple of the New York Stock Exchange. Anheuser-Bush has consistently outperformed the S&P 500, as can be seen in Chart 4. Its return on equity in 2003 was 78.7% while the industry and the S&P 500 were 24.2 and 13.7 respectively.3 Anheuser-Busch outperforms the industry and the S&P 500 on many other levels as well. Anheuser-Busch currently enjoys a net income growth rate of 10.5% over the last three years while the industry lags at 7.5%. The S&P 500 experienced a negative growth rate for the last three years. Anheuser-Busch also enjoys larger profit margins than the industry and the S&P 500. Financial information not covered in this portion of this paper is provided by Valueline in the Appendix under table 3.
The “financial statements are formal reports providing information on a company's financial position, cash inflows and outflows, and the results of operations” (Hermanson, p.22). There are four main components that make up a financial statement. The four parts are, balance sheet, income statements, cash flow and, statement of owner’s equity. The balance sheets role is to define the company’s assets liabilities and revenue of the business. The income statement shows the income within the company. Cash flow reviews the position of the company by cash payments and receipts. Lastly, the statement of owner’s equity shows the amount of earnings, stock and other capitals of people in the company. (Hermanson, p.34-35).
Ark Restaurant and BJ 's Restaurants,Inc. are rivals in the eatery business. Beside the undeniable likenesses characteristic to the foodservice business (giving great food services, and a welcoming environment to their different clients), these two organizations are altogether different when seen through a monetary point of view. To assess these two organizations, I have arranged a financial statements and figured also key ratios that will be utilized to show and also further explain these crucial contrasts.
Accountants, business owners, investors, creditors and employees use four basic financial statements of an organization to determine the financial well-being and future earnings potential of that organization. Financial statements are a key tool in seeing and understanding the past, present and future condition of an organization. What are these financial statements and what do they mean to the reader? Do the financial statements mean something completely different to an investor, creditor, and employee?
Earnings before income taxes also increased from $3,903.00 to $4,198.60, an increase of 8%. Both net earnings including noncontrolling interests and net earning attributable to Starbucks saw a small percentage increase at 2%. Examining the vertical analysis of the income statement, one can see that all three net revenue categories – company-operated stores (79%), licensed stores (10%), and CPG (11%) – have the same percentage from both years. Similar to net revenues, the 2016 expenses and net earnings have very similar percentages to those of 2015.
The financial statements are very useful to all this group of user. Explain each of them;