Chapter 6, Problem 6.2MAD

Analyze and compare Darden Restaurants to Panera Bread

 Darden Restaurants, Inc. (DRI) is the Largest full-service restaurant company in the world. It operates over 2,200 restaurants under a variety of brand names, including Olive Garden. Bahama Breeze, and LongHorn Steakhouse. Panera Bread Company (PNRA) operates over 1,800 bakery-café locations across North America. It is one of the largest food service companies in the United States. The cost of food, beverage, and packaging and the beginning and ending inventory balances from recent annual reports for Darden and Panera are as follows (in millions):

	Darden	Panera
Cost of goods sold (food, beverage, and packaging)	$2.039.7	$715.5
Inventories:
Beginning of year	163.9	22.8
End of year	175.4	22.5

1. a. Compute the inventory turnover for both companies. Round calculations to one decimal place.
2. b. Compute the number of days’ sales in inventory for both companies. Round calculations to one decimal place.
3. c. Which company is more efficient in managing inventory?
4. d. What might explain the difference in the inventory management efficiency of the two companies?