Suppose the years 2005 to 2009 were a period of rapid growth for a certain chain of coffeehouses and the company's revenues grew by more than 50% during that period. Use the hypothetical financial data for the company to answer the questions. Selected Financial Data (In millions, except earnings per share) As of and for the fiscal year ended Sept. 27, 2009 (52 wks) Sept. 28, 2008 (52 wks) Sept. 30, 2007 (52 wks) Oct. 1, 2006 (52 wks) Oct. 2, 2005 (52 wks) Results of Operations Net revenues: Company-operated retail $8,090.1 $8,671.9 $7,918.3 $6,453.1 $5,301.9 Specialty: Licensing 1,222.3 1,171.6 1,026.3 860.6 673.0 Food service and other 372.2 439.5 386.9 343.2 304.4 Total specialty 1,594.5 1,611.1 1,413.2 1,203.8 977.4 Total net revenues $9,684.6 $10,283.0 $9,331.5 $7,656.9 $6,279.3 Operating income $562.0 $503.9 $1,053.9 $894.0 $780.5 Earnings before cumulative effect of change in accounting principle 510.8 415.5 772.6 691.5 624.4 Cumulative effect of accounting change for asset retirement obligations, net of taxes — — — 17.2 — Net earnings $510.8 $415.5 $772.6 $674.3 $624.4 Earnings per common share before cumulative effect of change in accounting principle—diluted ("EPS") $0.52 $0.43 $0.87 $0.73 $0.61 Cumulative effect of accounting change for asset retirement obligations, net of taxes—per common share — — — 0.02 — EPS—diluted $0.52 $0.43 $0.87 $0.71 $0.61 Net cash provided by operating activities $1,389.0 $1,258.7 $1,331.2 $1,131.6 $922.9 Capital expenditures (additions to property, plant and equipment) $445.6 $984.5 $1,080.3 $771.2 $643.3 Balance Sheet Total assets $5,676.8 $5,742.6 $5,443.9 $4,498.9 $3,603.7 Short-term borrowings — 713.0 710.3 700.0 277.0 Long-term debt (including current portion) 549.5 550.3 550.9 2.7 3.6 Shareholders' equity $2,935.7 $2,390.9 $2,154.1 $2,118.5 $2,020.3 (a) Calculate the asset turnover ratio for 2008 and 2009. (Round your answers to two decimal places.) 2008 2009 (b) Calculate the net profit margin (as a %) for 2007, 2008, and 2009. (Round your answers to the nearest tenth of a percent.) 2007 %2008 %2009 % (c) Calculate the return on investment (as a %) for 2007, 2008, and 2009. (Round your answers to the nearest tenth of a percent.) 2007 %2008 %2009 % (d) Prepare a trend analysis of the net revenue and total assets for 2005 through 2009. (Round your answers to one decimal place.) 2009 2008 2007 2006 2005 Net Revenue 100.0 Total Assets 100.0

Suppose the years 2005 to 2009 were a period of rapid growth for a certain chain of coffeehouses and the company's revenues grew by more than 50% during that period. Use the hypothetical financial data for the company to answer the questions. Selected Financial Data (In millions, except earnings per share) As of and for the fiscal year ended Sept. 27, 2009 (52 wks) Sept. 28, 2008 (52 wks) Sept. 30, 2007 (52 wks) Oct. 1, 2006 (52 wks) Oct. 2, 2005 (52 wks) Results of Operations Net revenues: Company-operated retail $8,090.1 $8,671.9 $7,918.3 $6,453.1 $5,301.9 Specialty: Licensing 1,222.3 1,171.6 1,026.3 860.6 673.0 Food service and other 372.2 439.5 386.9 343.2 304.4 Total specialty 1,594.5 1,611.1 1,413.2 1,203.8 977.4 Total net revenues $9,684.6 $10,283.0 $9,331.5 $7,656.9 $6,279.3 Operating income $562.0 $503.9 $1,053.9 $894.0 $780.5 Earnings before cumulative effect of change in accounting principle 510.8 415.5 772.6 691.5 624.4 Cumulative effect of accounting change for asset retirement obligations, net of taxes — — — 17.2 — Net earnings $510.8 $415.5 $772.6 $674.3 $624.4 Earnings per common share before cumulative effect of change in accounting principle—diluted ("EPS") $0.52 $0.43 $0.87 $0.73 $0.61 Cumulative effect of accounting change for asset retirement obligations, net of taxes—per common share — — — 0.02 — EPS—diluted $0.52 $0.43 $0.87 $0.71 $0.61 Net cash provided by operating activities $1,389.0 $1,258.7 $1,331.2 $1,131.6 $922.9 Capital expenditures (additions to property, plant and equipment) $445.6 $984.5 $1,080.3 $771.2 $643.3 Balance Sheet Total assets $5,676.8 $5,742.6 $5,443.9 $4,498.9 $3,603.7 Short-term borrowings — 713.0 710.3 700.0 277.0 Long-term debt (including current portion) 549.5 550.3 550.9 2.7 3.6 Shareholders' equity $2,935.7 $2,390.9 $2,154.1 $2,118.5 $2,020.3 (a) Calculate the asset turnover ratio for 2008 and 2009. (Round your answers to two decimal places.) 2008 2009 (b) Calculate the net profit margin (as a %) for 2007, 2008, and 2009. (Round your answers to the nearest tenth of a percent.) 2007 %2008 %2009 % (c) Calculate the return on investment (as a %) for 2007, 2008, and 2009. (Round your answers to the nearest tenth of a percent.) 2007 %2008 %2009 % (d) Prepare a trend analysis of the net revenue and total assets for 2005 through 2009. (Round your answers to one decimal place.) 2009 2008 2007 2006 2005 Net Revenue 100.0 Total Assets 100.0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Selected Financial Data (In millions, except earnings per share)

As of and for the fiscal year ended	Sept. 27, 2009 (52 wks)	Sept. 28, 2008 (52 wks)	Sept. 30, 2007 (52 wks)	Oct. 1, 2006 (52 wks)	Oct. 2, 2005 (52 wks)
Results of Operations
Net revenues:
Company-operated retail	$8,090.1	$8,671.9	$7,918.3	$6,453.1	$5,301.9
Specialty:
Licensing	1,222.3	1,171.6	1,026.3	860.6	673.0
Food service and other	372.2	439.5	386.9	343.2	304.4
Total specialty	1,594.5	1,611.1	1,413.2	1,203.8	977.4
Total net revenues	$9,684.6	$10,283.0	$9,331.5	$7,656.9	$6,279.3
Operating income	$562.0	$503.9	$1,053.9	$894.0	$780.5
Earnings before cumulative effect of change in accounting principle	510.8	415.5	772.6	691.5	624.4
Cumulative effect of accounting change for asset retirement obligations, net of taxes	—	—	—	17.2	—
Net earnings	$510.8	$415.5	$772.6	$674.3	$624.4
Earnings per common share before cumulative effect of change in accounting principle—diluted ("EPS")	$0.52	$0.43	$0.87	$0.73	$0.61
Cumulative effect of accounting change for asset retirement obligations, net of taxes—per common share	—	—	—	0.02	—
EPS—diluted	$0.52	$0.43	$0.87	$0.71	$0.61
Net cash provided by operating activities	$1,389.0	$1,258.7	$1,331.2	$1,131.6	$922.9
Capital expenditures (additions to property, plant and equipment)	$445.6	$984.5	$1,080.3	$771.2	$643.3
Balance Sheet
Total assets	$5,676.8	$5,742.6	$5,443.9	$4,498.9	$3,603.7
Short-term borrowings	—	713.0	710.3	700.0	277.0
Long-term debt (including current portion)	549.5	550.3	550.9	2.7	3.6
Shareholders' equity	$2,935.7	$2,390.9	$2,154.1	$2,118.5	$2,020.3

(a)

Calculate the asset turnover ratio for 2008 and 2009. (Round your answers to two decimal places.)

2008 2009

(b)

Calculate the net profit margin (as a %) for 2007, 2008, and 2009. (Round your answers to the nearest tenth of a percent.)

2007 %2008 %2009 %

(c)

Calculate the return on investment (as a %) for 2007, 2008, and 2009. (Round your answers to the nearest tenth of a percent.)

2007 %2008 %2009 %

(d)

Prepare a trend analysis of the net revenue and total assets for 2005 through 2009. (Round your answers to one decimal place.)

	2009	2008	2007	2006	2005
Net Revenue					100.0
Total Assets					100.0

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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