El Pollo Loco Holdings, Inc. (LOCO), Spanish for “The Crazy Chicken,” operates almost 500 restaurants, approximately 40% of which are company-owned and the rest are franchises. El Pollo Loco combines the culinary traditions of Mexico and California, creating unique menu items such as their signature Chicken Avocado Burrito. The company aims to improve profitability, in part, by simplifying operations to make it easier for employees and franchisees to run the restaurants. Recent data (in millions) for company-operated and franchised restaurants are as follows: Line Item Description Company-Operated Franchised Revenues $374 $29 Operating income 62 1 Invested assets 79 2 a. Determine the profit margin for each segment. Round to one decimal place. Line Item Description Profit margin Company-Operated fill in the blank 1% Franchised fill in the blank 2% b. Determine the investment turnover for each segment. Round to two decimal places. Line Item Description Investment Turnover Company-Operated fill in the blank 3 Franchised fill in the blank 4 c. Use the DuPont formula to determine the return on investment for each segment. Round to one decimal place. Line Item Description Return on Investment Company-Operated fill in the blank 5% Franchised fill in the blank 6%
El Pollo Loco Holdings, Inc. (LOCO), Spanish for “The Crazy Chicken,” operates almost 500 restaurants, approximately 40% of which are company-owned and the rest are franchises. El Pollo Loco combines the culinary traditions of Mexico and California, creating unique menu items such as their signature Chicken Avocado Burrito. The company aims to improve profitability, in part, by simplifying operations to make it easier for employees and franchisees to run the restaurants. Recent data (in millions) for company-operated and franchised restaurants are as follows: Line Item Description Company-Operated Franchised Revenues $374 $29 Operating income 62 1 Invested assets 79 2 a. Determine the profit margin for each segment. Round to one decimal place. Line Item Description Profit margin Company-Operated fill in the blank 1% Franchised fill in the blank 2% b. Determine the investment turnover for each segment. Round to two decimal places. Line Item Description Investment Turnover Company-Operated fill in the blank 3 Franchised fill in the blank 4 c. Use the DuPont formula to determine the return on investment for each segment. Round to one decimal place. Line Item Description Return on Investment Company-Operated fill in the blank 5% Franchised fill in the blank 6%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Analyze El Pollo Loco Holdings, Inc.
El Pollo Loco Holdings, Inc. (LOCO), Spanish for “The Crazy Chicken,” operates almost 500 restaurants, approximately 40% of which are company-owned and the rest are franchises. El Pollo Loco combines the culinary traditions of Mexico and California, creating unique menu items such as their signature Chicken Avocado Burrito. The company aims to improve profitability, in part, by simplifying operations to make it easier for employees and franchisees to run the restaurants. Recent data (in millions) for company-operated and franchised restaurants are as follows:
| Line Item Description | Company-Operated | Franchised |
|---|---|---|
| Revenues | $374 | $29 |
| Operating income | 62 | 1 |
| Invested assets | 79 | 2 |
a. Determine the profit margin for each segment. Round to one decimal place.
| Line Item Description | Profit margin |
|---|---|
| Company-Operated | fill in the blank 1% |
| Franchised | fill in the blank 2% |
b. Determine the investment turnover for each segment. Round to two decimal places.
| Line Item Description | Investment Turnover |
|---|---|
| Company-Operated | fill in the blank 3 |
| Franchised | fill in the blank 4 |
c. Use the DuPont formula to determine the
| Line Item Description | Return on Investment |
|---|---|
| Company-Operated | fill in the blank 5% |
| Franchised | fill in the blank 6% |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education