Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 1, Problem 5MAD
Compare Papa John’s and Yum! Brands
The following total liabilities and stockholders’ equity information (in millions) is provided for Papa John’s International, Inc. (PZZA) and Yum! Brands, Inc. (YUM) at the end of a recent year:
Yum! Brands is a much larger company than is Papa John’s; however, both companies compete internationally in the fast food business. Papa John’s is primarily in the carry-out and delivery pizza business, while Yum! Brands is in the quick-service restaurant business with its Pizza Hut, Taco Bell, and KFC brands.
- a. Compute the ratio of liabilities to stockholders’ equity for each company. Round to one decimal place.
- b. What conclusions regarding the margin of protection to creditors can you draw for these two companies?
- c. Which company is more risky to creditors?
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The following total liabilities and stockholders* equity information (in millions) is provided for Papa John's International, Inc. (PZZA) and Yum! Brands, Inc. (YUM) at the end of a recent year:
Yum! Brands is a much larger company than is Papa John's; however, both companies compete internationally in the fast food business. Papa John's is primarily in the carry-out and delivery pizza business, while Yum! Brands is in the quick-service restaurant business with its Pizza Hut, Taco Bell, and KFC brands.a. Compute the ratio of liabilities to stockholders' equity for each company. Round to one dec imal place.b. What conclusions regarding the margin of protection to creditors can you draw for these two companies?c. Which company is more risky to creditors?
Recent balance sheet information for two companies in the food industry, Santa Fe Company and Madrid Company, is as follows (in thousands):
Santa Fe
Madrid
Net property, plant, and equipment
$565,680
$773,920
Current liabilities
305,732
747,820
Long-term debt
697,672
696,528
Other long-term liabilities
245,128
270,872
Stockholders' equity
304,520
381,160
a. Determine the ratio of liabilities to stockholders' equity for both companies. Round your answers to one decimal place.
Santa Fe
fill in the blank 1
Madrid
fill in the blank 2
b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round your answers to one decimal place.
Santa Fe
fill in the blank 3
Madrid
fill in the blank 4
Recent balance sheet information for two companies in the food industry, Santa Fe Company and Madrid Company, is as follows (in thousands):
Santa Fe
Madrid
Net property, plant, and equipment
$428,320
$817,800
Current liabilities
104,441
471,040
Long-term debt
396,196
588,816
Other long-term liabilities
139,204
228,984
Stockholders' equity
172,930
322,210
a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place.
Santa Fe
Madrid
b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round to one decimal place.
Santa Fe
Madrid
Chapter 1 Solutions
Financial And Managerial Accounting
Ch. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Josh Reilly is the owner of Dispatch Delivery...Ch. 1 - On July 12, Reliable Repair Service extended an...Ch. 1 - Prob. 6DQCh. 1 - Describe the difference between an account...Ch. 1 - A business had revenues of 679,000 and operating...Ch. 1 - A business had revenues of 640,000 and operating...Ch. 1 - The financial statements are interrelated. (A)...
Ch. 1 - Prob. 1BECh. 1 - Accounting equation Be-The-One is a motivational...Ch. 1 - Transactions Interstate Delivery Service is owned...Ch. 1 - Income statement The revenues and expenses of...Ch. 1 - Statement of stockholders equity Using the income...Ch. 1 - Balance sheet Using the following data for...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Ratio of liabilities to stockholders equity The...Ch. 1 - Prob. 1ECh. 1 - Prob. 2ECh. 1 - Prob. 3ECh. 1 - Accounting equation The total assets and total...Ch. 1 - Prob. 5ECh. 1 - Accounting equation Determine the missing amount...Ch. 1 - Accounting equation Inspirational Inc. is a...Ch. 1 - Asset, liability, and stockholders equity items...Ch. 1 - Effect of transactions on accounting equation What...Ch. 1 - Effect of transactions on accounting equation A. A...Ch. 1 - Effect of transactions on stockholders equity...Ch. 1 - Transactions The following selected transactions...Ch. 1 - Nature of transactions Teri West operates her own...Ch. 1 - Net income and dividends The income statement for...Ch. 1 - Net income and stockholders equity for four...Ch. 1 - Balance sheet items From the following list of...Ch. 1 - Income statement items Based on the data presented...Ch. 1 - Statement of stockholders equity Financial...Ch. 1 - Income statement Imaging Services was organized on...Ch. 1 - Prob. 20ECh. 1 - Balance sheets, net income Financial information...Ch. 1 - Financial statements Each of the following items...Ch. 1 - Statement of cash flows Indicate whether each of...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Financial statements We-Sell Realty was organized...Ch. 1 - Transactions On April 1 of the current year,...Ch. 1 - Financial statements The assets and liabilities of...Ch. 1 - Financial statements Seth Feye established...Ch. 1 - Transactions; financial statements On August 1,...Ch. 1 - Transactions; financial statements DLite Dry...Ch. 1 - Missing amounts from financial statements The...Ch. 1 - Transactions Amy Austin established an insurance...Ch. 1 - PR 1-2 B Financial statements The assets and...Ch. 1 - Financial statements 1. Net income: 10,900 Jose...Ch. 1 - Transactions; financial statements 2. Net income:...Ch. 1 - Transactions; financial statements Bevs Dry...Ch. 1 - Missing amounts from financial statements The...Ch. 1 - Peyton Smith enjoys listening to all types of...Ch. 1 - Prob. 1MADCh. 1 - Analyze The Home Depot for three years The Home...Ch. 1 - Analyze Lowes for three years Lowes Companies,...Ch. 1 - Compare The Home Depot and Lowes Using your...Ch. 1 - Compare Papa Johns and Yum! Brands The following...Ch. 1 - Prob. 1TIFCh. 1 - Prob. 2TIFCh. 1 - Prob. 4TIFCh. 1 - Prob. 5TIFCh. 1 - Prob. 6TIF
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