Pizza Industry : A Fast Food Company

843 WordsMar 21, 20174 Pages
Business information Pizza Pizza Royalty Corp. is a fast food company located in Canada that services pizza, chicken, other snacks. Currently the chain has 751 restaurants in the royalty pool, of those 651 are Pizza Pizza and 100 are Pizza 73 restaurant. The company’s head office is located in Toronto, Ontario. The company’s financial statements are prepared in accordance to IFRS. Pizza Pizza’s sales from last year were approximately 533 million which is about a 4.5% growth. Risk Assignment (Inherent Risk & Control) Credit risk can be an issue as all the royalties’ revenue comes from the same segments which is Pizza Pizza and Pizza 73 that are in the food industry, as the food industry is competitive, it could be difficult for some PPL’s…show more content…
If a partial increase in Cash and cash equivalents resulted from the receivables a decrease should have also occurred. In 2015, a decrease of 667 million was reported in payables to Pizza Pizza Limited which resulted from distributions to holding Class B and Class D Exchangeable Shares and other expenses paid by PPL on behalf of the partnership. Also, an increase of 307 million was reported in receivable from Pizza Pizza Limited, this resulted from the income from royalty sales. Looking at the Trade and other Payables there was a total increase of 120million of which 114 million was the result of an increase in accruals. And 6million increase resulted from an increase in other payables. The change of 3 thousand in borrowing occurred from the deferral finance fees and no other borrowings were reported under this section. Approximately a decrease of 23 million (8.1%) resulted in Exchangeable Shares this was due to the amended and restated agreement for Class B and Class D. An issuance of 2.8 million equivalent commons for Class B partnership unit resulted in approximate 30 million increase which was used to gain a greater entitlement to the partnership income rather than cash. Materiality 5% of earnings from continuing operation would the best option as the guideline for this type of business, as it does not involve real estate. It also is not a mutual funds industry as well

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