California Pizza Kitchen opened its first restaurant In Beverly Hills in 1985. Almost immediately after the first location opened, it expanded from California to more than 250 locations in more than 30 states and 11 countries. California Pizza Kitchen completed an initial public offering in August 2000 and traded on the NASDAQ National Market under the ticker symbol CPKI. On July 7, 2011, Golden Gate Capital completed the acquisition of California Pizza Kitchen and, as a result of the acquisition, the company’s common stock is no longer publicly traded. CALIFORNIA PIZZA KITCHEN, INC., AND SUBSIDIARIESConsolidated Statements of OperationsYears ended January 2, 2011, January 3, 2010, and December 28, 2008(amounts in thousands, except for per share data) 2010 2009 2008 Revenues: Restaurant sales$648,201 $669,270 $691,711 Royalties from licensing agreement 6,972 8,589 7,430 Domestic franchise revenues 4,205 3,789 3,862 International franchise revenues 2,658 2,333 2,376 Total revenues 662,036 683,981 705,379 Costs and expenses: Food, beverage and paper supplies 151,367 156,816 168,161 Labor 243,338 250,155 250,081 Direct operating and occupancy 151,770 144,557 142,951 Cost of sales 546,475 551,528 561,193 General and administrative 54,556 54,616 55,467 Depreciation and amortization 39,641 42,816 42,934 Pre-opening costs 3,524 2,098 4,733 Loss on impairment of property and equipment 19,164 23,366 13,761 Store closure costs 1,980 811 1,305 Litigation, settlement and other costs 8,844 1,694 821 Total costs and expenses 674,184 676,929 680,214 Operating (loss)/income (12,148) 7,052 25,165 Interest expense, net (19) (1,043) (1,579) (Loss)/income before income tax (benefit)/provision (12,167) 6,009 23,586 Income tax (benefit)/provision (11,354) (2,312) 5,189 Net (loss)/income$(813) $8,321 $18,397 Net (loss)/income per common share: Basic$(0.03) $0.32 $0.46 Diluted$(0.03) $0.32 $0.46 Weighted average shares used in calculating net (loss)/income per common share: Basic 24.743 24.319 25.448 Diluted 24.743 24.398 25.466 CALIFORNIA PIZZA KITCHEN, INC., AND SUBSIDIARIESConsolidated Balance SheetsJanuary 2, 2011, and January 3 2010(in thousands, except for share data) 2010 2009 Assets Current assets: Cash and cash equivalents$55,230 $55,424 Other receivables 23,399 24,346 Inventories 10,002 9,552 Current deferred tax asset, net 10,350 9,201 Prepaid rent 686 8,952 Other prepaid expenses 10,253 4,666 Total current assets 109,920 112,141 Property and equipment, net 301,881 304,451 Noncurrent deferred tax asset, net 24,413 27,323 Goodwill 8,617 8,617 Other intangibles, net 7,489 7,366 Other assets 10,608 9,204 Total assets$462,928 $469,102 Liabilities and stockholders’ equity Current liabilities: Accounts payable$28,380 $15,768 Accrued compensation and benefits 26,095 26,023 Accrued rent 29,536 23,299 Deferred rent credits 8,323 7,910 Other accrued liabilities 44,290 41,515 Gift card liability 27,127 31,690 Store closure reserve 88 1,261 Total current liabilities 163,839 147,466 Long-term debt --- 24,000 Other liabilities 25,304 18,695 Deferred rent credits, net of current portion 38,663 37,964 Income taxes payable, net of current portion 744 11,760 Commitments and contingencies - - Stockholders’ equity: Common stock—$0.01 par value, 80,000,000 shares authorized, 26,279,797 and 25,895,800 shares issued and outstanding at January 2, 2011, and January 3, 2010, respectively 263 259 Additional paid-in capital 196,563 191,000 Retained earnings 37,552 37,958 Total stockholders’ equity 234,378 229,217 Total liabilities and stockholders’ equity$462,928 $469,102 a. Current ratiob. Quick ratioc. Profit margind. Return on equitye. Inventory turnoverf. Debt-to-equityg. Earnings per share%%

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Answered: a. Current ratio b. Quick ratio c.…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 37CE: Stockholder Profitability Ratios The following information pertains to Montague Corporation...

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California Pizza Kitchen opened its first restaurant In Beverly Hills in 1985. Almost immediately after the first location opened, it expanded from California to more than 250 locations in more than 30 states and 11 countries. California Pizza Kitchen completed an initial public offering in August 2000 and traded on the NASDAQ National Market under the ticker symbol CPKI. On July 7, 2011, Golden Gate Capital completed the acquisition of California Pizza Kitchen and, as a result of the acquisition, the company’s common stock is no longer publicly traded.

CALIFORNIA PIZZA KITCHEN, INC., AND SUBSIDIARIES Consolidated Statements of Operations Years ended January 2, 2011, January 3, 2010, and December 28, 2008 (amounts in thousands, except for per share data)
		2010		2009		2008
	Revenues:
	Restaurant sales	$	648,201		$	669,270	$	691,711
	Royalties from licensing agreement		6,972			8,589		7,430
	Domestic franchise revenues		4,205			3,789		3,862
	International franchise revenues		2,658			2,333		2,376

	Total revenues		662,036			683,981		705,379
	Costs and expenses:
	Food, beverage and paper supplies		151,367			156,816		168,161
	Labor		243,338			250,155		250,081
	Direct operating and occupancy		151,770			144,557		142,951

	Cost of sales		546,475			551,528		561,193
	General and administrative		54,556			54,616		55,467
	Depreciation and amortization		39,641			42,816		42,934
	Pre-opening costs		3,524			2,098		4,733
	Loss on impairment of property and equipment		19,164			23,366		13,761
	Store closure costs		1,980			811		1,305
	Litigation, settlement and other costs		8,844			1,694		821

	Total costs and expenses		674,184			676,929		680,214

	Operating (loss)/income		(12,148)			7,052		25,165
	Interest expense, net		(19)			(1,043)		(1,579)

	(Loss)/income before income tax (benefit)/provision		(12,167)			6,009		23,586
	Income tax (benefit)/provision		(11,354)			(2,312)		5,189

	Net (loss)/income	$	(813)		$	8,321	$	18,397

	Net (loss)/income per common share:
	Basic	$	(0.03)		$	0.32	$	0.46

	Diluted	$	(0.03)		$	0.32	$	0.46

	Weighted average shares used in calculating net (loss)/income per common share:
	Basic		24.743			24.319		25.448

	Diluted		24.743			24.398		25.466

CALIFORNIA PIZZA KITCHEN, INC., AND SUBSIDIARIES Consolidated Balance Sheets January 2, 2011, and January 3 2010 (in thousands, except for share data)
			2010		2009
	Assets
	Current assets:
	Cash and cash equivalents	$	55,230	$	55,424
	Other receivables		23,399		24,346
	Inventories		10,002		9,552
	Current deferred tax asset, net		10,350		9,201
	Prepaid rent		686		8,952
	Other prepaid expenses		10,253		4,666

	Total current assets		109,920		112,141
	Property and equipment, net		301,881		304,451
	Noncurrent deferred tax asset, net		24,413		27,323
	Goodwill		8,617		8,617
	Other intangibles, net		7,489		7,366
	Other assets		10,608		9,204

	Total assets	$	462,928	$	469,102

	Liabilities and stockholders’ equity
	Current liabilities:
	Accounts payable	$	28,380	$	15,768
	Accrued compensation and benefits		26,095		26,023
	Accrued rent		29,536		23,299
	Deferred rent credits		8,323		7,910
	Other accrued liabilities		44,290		41,515
	Gift card liability		27,127		31,690
	Store closure reserve		88		1,261

	Total current liabilities		163,839		147,466

	Long-term debt		---		24,000
	Other liabilities		25,304		18,695
	Deferred rent credits, net of current portion		38,663		37,964
	Income taxes payable, net of current portion		744		11,760
	Commitments and contingencies		-		-
	Stockholders’ equity:
	Common stock—$0.01 par value, 80,000,000 shares authorized, 26,279,797 and 25,895,800 shares issued and outstanding at January 2, 2011, and January 3, 2010, respectively		263		259
	Additional paid-in capital		196,563		191,000
	Retained earnings		37,552		37,958

	Total stockholders’ equity		234,378		229,217

	Total liabilities and stockholders’ equity	$	462,928	$	469,102

a. Current ratio
b. Quick ratio
c. Profit margin
d. Return on equity
e. Inventory turnover
f. Debt-to-equity
g. Earnings per share
%
%

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a. Current ratio b. Quick ratio c. Profit margin %