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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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    
                    
 
**Financial Ratios Template**

This template presents various key financial ratios that are used to analyze the financial health and performance of a company. Below are the categories included:

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

Each row corresponds to a specific financial metric:

- **Current Ratio**: Indicates a company's ability to pay short-term obligations with its short-term assets.
- **Quick Ratio**: A more stringent test of liquidity that excludes inventory from current assets.
- **Profit Margin**: Shows the percentage of revenue that exceeds costs.
- **Return on Equity**: Measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.
- **Inventory Turnover**: Indicates how many times a company's inventory is sold and replaced over a period.
- **Debt-to-Equity**: Compares a company's total liabilities to its shareholder equity.
- **Earnings per Share**: The portion of a company's profit allocated to each outstanding share of common stock.

Use this template as a guide to analyze the mentioned financial ratios for a comprehensive understanding of a company's financial performance.
Transcribed Image Text:**Financial Ratios Template** This template presents various key financial ratios that are used to analyze the financial health and performance of a company. Below are the categories included: | **a.** | **Current ratio** | | |--------|-----------------------------|-----------| | **b.** | **Quick ratio** | | | **c.** | **Profit margin** | **%** | | **d.** | **Return on equity** | **%** | | **e.** | **Inventory turnover** | | | **f.** | **Debt-to-equity** | | | **g.** | **Earnings per share** | | Each row corresponds to a specific financial metric: - **Current Ratio**: Indicates a company's ability to pay short-term obligations with its short-term assets. - **Quick Ratio**: A more stringent test of liquidity that excludes inventory from current assets. - **Profit Margin**: Shows the percentage of revenue that exceeds costs. - **Return on Equity**: Measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. - **Inventory Turnover**: Indicates how many times a company's inventory is sold and replaced over a period. - **Debt-to-Equity**: Compares a company's total liabilities to its shareholder equity. - **Earnings per Share**: The portion of a company's profit allocated to each outstanding share of common stock. Use this template as a guide to analyze the mentioned financial ratios for a comprehensive understanding of a company's financial performance.
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2. By what amount did working capital change?
   

     

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Thanks, need help with the other ratios as well.

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