Acct 201 Course Project Assignment #2-GROUP for [insert INDUSTRY.docx

Acct 201 Course Project Assignment #2-GROUP for [insert
INDUSTRY name] page 2
Template for Course Project Assignment #2-
GROUP[footnoteRef:1] due 12/10/13 [1: Robert Bowen and
Jane Jollineau of the University of San Diego prepared this
template. Revised: 8/18/13. ]
Analyzing and Evaluating the Companies in Your Industry
Industry
name
Your names
Sect #
Combine the data you collected individually and make
comparisons across the industry.
Part 1: Compare Financial Ratios (compiled from your
individual assignments)
Part 1A: Profitability, asset utilization and financial leverage
Insert the ratios below for each of the companies in your group
based on the most recent available year. Note that the ratios are
described in more detail in the textbook.
Company name
ROE
ROA

Profit margin
Asset turnover
Debt to Assets
1.
2.
3.
4.
5. (if needed)
6. (if needed)

Industry average**
Source of industry average**
** It is probably best to get the industry averages from external
websites. Note that the ratios on these websites may have
different names than we have used in class or in the textbook.
Further, you may not find all of the ratios you have calculated
so begin by comparing key ones you can find. One website to
consider is the “Industry center” at
http://biz.yahoo.com/ic/ind_index.html. See Blackboard for
definitions of the terms used on Finance Yahoo. You may also
find company and industry information by searching
www.finance.yahoo.com and www.google.com/finance. If you
cannot find industry ratios, also consider
http://www.bizstats.com/corporation-industry-financials/ where
you will have to drill down through their menus to find your
industry. This will give you most of the ratios that you need for
comparisons, but they may be old (e.g., from 2009). Finally, as
a last resort, you can just average the firms covered by your
group and call that the industry average. Regardless, please tell
me the approach you used.
The purpose of the table below is to rank each company in your

group from highest to lowest on the ratios above, except for
Debt to Assets, which should be lowest to highest. Insert (an
abbreviated company name) in each cell below:
Rank
ROE
(highest = 1)
ROA
(highest = 1)
Profit margin
(highest = 1)
Asset turnover
(highest = 1)
Debt to Assets
(lowest = 1)
1
2
3
4

5
6
Part 1B: Liquidity
Compare the companies in your group on liquidity using the
most recent available year:
Company
Current ratio
Quick ratio*
1.
2.
3.
4.

5. (if needed)
6. (if needed)
Industry average (& source**)
* Quick ratio = Quick assets (cash + short term investments +
accounts receivable) ÷ current liabilities
** See the note below the table in Part 1A.
The purpose of the table below is to rank each company in your
group from highest to lowest on the liquidity ratios above.
Insert a company name in each cell below:
Rank
Current ratio
(highest = 1)
Quick ratio
(highest = 1)
1
2
3
4
5

6
Part 1C. Discuss your ratio analyses
What is your overall assessment of the (i) financial condition
and (ii) performance of the companies you analyzed? Refer to
any of the above numbers or ratios in your brief summary.
[insert your discussion here]
Part 2: Compare Stock Price changes (compiled from individual
Stock Monitoring Worksheets)
A. Record the stock price data below for each of the companies
in your group based on the most recent available year:
Company
Stock exchange*
Beginning stock price
Ending stock price
% change in stock price**
1.
2.
3.

4.
5. (if needed)
6. (if needed)
* Each company’s stock trades on a stock exchange, e.g., New
York Stock Exchange (NYSE), Nasdaq, AMEX
** % change in the stock price = (ending stock price at 12/3/13
– beginning stock price at 9/24/13) ÷ beginning stock price at
9/24/13. You may express this as either a decimal fraction or a
%.
B. Plot the Stock Prices of the Best and Worst performers above
against a Stock Price Index
Of the companies above, plot the stock prices of the best and
worst performers against the stock index that represents the
greatest number of companies in your industry. Go to
finance.yahoo.com and follow these steps:

· Enter a ticker symbol of the ‘best’ performing company (e.g.,
APPL).
· Choose “Interactive” below CHARTS in the left hand menu.
· In the lower right corner, insert the date range: 9/24/13 to
12/3/13 (#1 on the attached example).
· Click on the ‘Compare’ drop down menu at the top of the chart
and type in the ticker symbol of the ‘worst’ performing
company (e.g., HPQ). Next, select one index (e.g., Dow Jones,
Nasdaq or S&P 500) that you believe is best to use for
comparison. (See #2 on the example below.) This should
generate three plots: the best performer, the worst performer
and the index.
· Label each plot (see #3 on the example below). (Labeling this
by hand is okay.)
Insert your chart below here. [Below is an example using a date
range from a prior semester:]
C. Discuss the Stock Price Trends
Discuss below the factors that you believe resulted in the above
stock market trends for the best and worst performers (relative
to the broader stock index). Does this correspond to the ratio
analysis you conducted in part 1 above?
[insert your discussion here]
Part 3. Your recommendation as an analyst/investor
Based on your analysis of each company and the industry, for
each of the companies you covered, state whether you would
recommend buying more (buy), holding the stock you have
(hold) or selling (sell). Briefly state why in the space provided.

Company
Recommen-dation*
Briefly discuss your reasoning below
1.
2.
3.
4.
5. (if needed)
6. (if needed)
* Buy, hold or sell (and feel free to embellish if you feel
strongly, e.g., “strong buy” or “strong sell.”)
Part 4. How would you rate this project for helping you learn
about your companies, their financial reporting and their stock
prices?(please circle one word below)
Excellent Very good Good Fair Poor
Very poor
Part 5. Your recommendations on improving this project?

List your recommendations (if any) on improving this project
for future students.
[insert any suggestions here and use additional pages if
necessary] Thanks!
Acct 201 Course Project Assignment #1-IND for [insert
company name] page 12
INDIVIDUAL[footnoteRef:1] due 11/5/13 [1: Robert Bowen
and Jane Jollineau of the University of San Diego prepared this
template. It borrows from a project prepared by Mark Judd.
Revised: 9/12/13. ]
Learning about your Company, its Financial Statements &
tracking its Stock Price
Your name
Other team member(s)
Section #
To begin, download your Company’s most recent SEC Form 10-
K in pdf format from its investor relation’s site,[footnoteRef:2]
and use it to answer the questions below in the space provided.
You will need to complete one template for each company.
[Search hint: every item you want may not be where you expect
it. If you cannot find it, type in what you are looking for (e.g.,
“preferred stock”) into the upper right hand search window in
the 10-K pdf file.] [2: To find SEC Form 10-K, go to your
company’s investor relation’s site, e.g.,

http://investor.apple.com and look for “SEC Filings.” You can
generally narrow this search by selecting “annual” under
“forms.” If you get a choice of file formats to download,
choose pdf format for readability and because the file can be
searched. ]
Part 1: Basic data on your company
Company name
JACK IN THE BOX INC
Company stock ticker symbol
JACK (NASDAQ)
Company headquarters location
9330 BALBOA AVENUE, SAN DIEGO, CA
Industry name
quick-service restaurants
CEO (who signed the letter to shareholders)
LINDA A. LANG - Chief Executive Officer & Chairman of the
Board
Company’s key Products or Services include:
Company operates and franchises more than 2,800 Jack in the
Box® quick-service restaurants
(“QSR”) and Qdoba Mexican Grill ® fast-casual restaurants
Customers tend to be: (this of course will be a generalization;
examples include: business, consumers, women, young
professionals, teens, etc.)
General Public
Closest competitors are:
Quick Stuff convenience, McDonald’s, Yum Brands, Starbucks,
Darden Restaurants

Part 2: Understanding the financial statements
Who is the Company’s auditor and where is the audit firm
located?
KPMG LLP, San Diego, California
Does the Company follow a fiscal year or calendar year?
Fiscal year ended September 30
If they do not use a calendar year, why do you believe that is?
FORM 10-K filed FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2012
Part 2A: The Balance Sheet
Find your Company’s Balance Sheet and answer the questions
below:
Insert numbers and compute financial ratios
Most recent year available
1st Prior Year
What is the balance sheet date? (e.g., 9/30/12 and 9/30/11)
SEPTEMBER 30, 2012
October 2, 2011
What is the dollar amount of total assets?
1,463,725
1,432,322
What is the dollar amount of total liabilities?
1,051,780
1,026,366
What is the dollar amount of total shareholders’ equity?
411,945
405,956
Does A = L + OE? (Yes or No)
Yes
Yes
Name the Company’s largest asset? Is it “current” or
“noncurrent”?

Building - Non current
Building - Non current
Does the Company have inventory? Why or why not?
Yes – it is required for the business
yes– it is required for the business
Name the Company’s largest liability? Is it “current” or
“noncurrent”?
Long term debt – non current
Long term debt – non current
What is the dollar amount of contributed capital? (preferred
stock + common stock + additional paid-in capital)
221,858
203,434
What is the dollar amount of earned capital? (retained earnings
+/- other comprehensive income)
984,658
967,080
Is earned capital increasing or decreasing? Why?
Increasing – net income
Does contributed capital plus earned capital add up to total
stockholders’ equity? If not, why not?
No – Treasury stock is deducted
No – Treasury stock is deducted
Calculate the current ratio (= current assets ÷ current liabilities)
– see textbook p. 59
0.84:1
0.91:1
Based on the current ratio, did the Company become more or
less liquid comparing its current year to the prior year?
Company became less liquid as the current ratio has decreased
Calculate the total debt to total assets ratio (= total liabilities ÷
total assets) – see textbook p. 60
0.72:1
0.72:1
Based on the total debt to total assets ratio computed above, is
the Company better off or worse off in its ability to withstand

long-term financial difficulties?
There is no change in debt to total assets ratio.
What is your overall assessment of your Company’s financial
condition? Refer to any of the above numbers or ratios in your
brief summary.
The company is financial stable and strong, as the company has
been able to raise 72% of total invested funds. The company has
invested its large amount in non-current assets. The biggest
investment had been made in buildings.
Part 2B: The Income Statement
Find your Company’s Income Statement and answer the
questions below:
What is the most recent year used for this analysis?
2012
How many years of comparative information are provided?
(usually = 3)
3
1st Prior Year
What is the dollar amount of total Revenue?
1,545,026
1,662,339
Compute the % change in revenue [= (most recent year’s

Revenue ÷ prior year’s Revenue) – 1]
(7.6%)
(12.49%)
What is the dollar amount of Gross Profit margin? (if given or
possible to calculate, Gross Profit = sales revenue minus cost of
goods sold)
343,279
321,172
Compute Gross Profit rate (= gross profit ÷ net sales revenue)
22.22%
16.9%
What is the dollar amount of Operating Income? (if given or
possible to calculate, Operating Income is revenues minus
expenses related to principal day-to-day operations and is
generally shown as a subtotal in the report.)
112,489
145,061
Compute the % change in Operating Income [= (most recent
year’s Op Inc ÷ prior year’s Op Inc) – 1]
(22.45%)
17.4%
What is the dollar amount of Net Income?
57,651
80,600
Compute the % change in Net Income = [(most recent year’s
Net Income ÷ prior year’s Net Income) – 1]
(28.47)
14.80%
What is reported as basic earnings per share (EPS)? (look it up
– no need to calculate)
1.31
1.63
What is your overall assessment of your Company’s
performance? Refer to any of the above numbers or ratios in
your brief summary.

The overall assessment of Income statement indicates that the
performance of the company in current year has down, when
compared with the previous year. Revenue has decreases and
therefore the expense ratio has increased. This resulted in the
decrease in profits.
Part 2C: The Statement of Cash Flows
Find your Company’s Statement of Cash Flows (SCF) and
answer the questions below:
What is the most recent year used for this analysis?
2012
How many years of comparative information are provided in the
SCF?
Three year
Insert the amounts requested below. Check the math by
summing to the cash balance at the end of the year. Verify that
the ending cash balance reported in the SCF is the same amount
reported on the balance sheet for the most recent year available.
Insert numbers and compute ratios:
1st Prior Year
Cash provided by operations
136,730
124,260
Cash from investing activities
(81,516)
(35,802)
Cash from financing activities

(58,169)
(87,641)
Change in cash (may be called “increase or decrease in cash &
equivalents”)
(2,955)
817
Cash & equivalents balance at beginning of the year
11,424
10,607
Cash & equivalents balance at year end
8,469
11,424
Does the balance in Cash & equivalents at fiscal year end in the
SCF match the amount shown in the Balance Sheet? (Yes or
No)
yes
yes
Compute Free Cash Flow (net cash provided by operations –
capital expenditures – cash dividends) – see textbook p. 61
55,214
88458
More Questions about the SCF
1st Prior Year
Name the largest cash outflow and the largest cash inflow in the
investing activities section of the SCF?
Purchases of property and equipment
Proceeds from the sale of company-operated restaurants

Purchases of property and equipment
Proceeds from the sale of company-operated restaurants
Name the largest cash inflow and the largest cash outflow in the
financing activities section of the SCF?
Borrowings on revolving credit facilities
Repayments of borrowings on revolving credit facilities
Borrowings on revolving credit facilities
Repayments of borrowings on revolving credit facilities
Part 2D: Financial Statement Analysis -- Common-Size Income
Statements
Fiscal Year
2012
2011
2010
2012
2011
2010
Revenues:

Company restaurant sales
12,19,214
13,80,273
16,68,527
78.91%
83.03%
87.84%
Franchise revenues
3,25,812
2,82,066
2,31,027
21.09%
16.97%
12.16%
Total revenues
15,45,026
16,62,339
18,99,554
100.00%
100.00%
100.00%
Operating costs and expenses, net:
Company restaurant costs:

Food and packaging (1)
4,00,012
4,60,790
5,30,613
25.89%
27.72%
27.93%
Payroll and employee benefits (1)
3,54,141
4,14,463
5,05,138
22.92%
24.93%
26.59%
Occupancy and other (1)
2,81,516
3,29,766
3,98,066
18.22%
19.84%
20.96%
Total company restaurant costs (1)
10,35,669
12,05,019
14,33,817
67.03%
72.49%
75.48%
Franchise costs (1)
1,66,078
1,36,148
1,04,845

10.75%
8.19%
5.52%
Selling, general and administrative expenses
2,27,003
2,24,653
2,43,453
14.69%
13.51%
12.82%
Impairment and other charges, net
32,932
12,583
48,864
2.13%
0.76%
2.57%
Gains on the sale of company-operated restaurants
-29,145
-61,125
-54,988
-1.89%
-3.68%
-2.89%
Earnings from operations
1,12,489
1,45,061
1,23,563
7.28%
8.73%
6.50%
What do you observe from the common-size analysis of your
company?

The sales revenue of Franchise has shown increasing trend,
while the resultant sales has shown decreasing trend.
The expenses has not been as per the increase / decrease of
revenues. Hence the earnings from operations has shown
changes in relation to revenue.
Part 2E: Insert your company’s financial statements here – this
should fit on 4 or 5 pages
Include copies of the following financial statements from the
Company’s 10-K – not abbreviated versions from Finance
Yahoo or Google Finance:
· Balance sheet (may be on two pages)
· Income statement
· Statement of Cash Flows
· Statement of Changes in Stockholders’ Equity
All four statement are attached in Annual report
Part 3: Discussion of a news article about the Company
Insert your first article discussion for this company here – this
should fit on one page. (You will submit a second article
discussion for this company with your final project.) Please use
a news article rather than an opinion piece from a blog such as
Seeking Alpha.
Description of Article discussion

Include one article summary for each company in the group (for
a total of four or six article summaries depending upon how
many members are in your group). The articles should be dated
no earlier than June 1, 2013. Summarize the article and its
impact on your company or the industry (and perhaps the
company’s stock price). Each article summary should include
the following (at a minimum):
Citation: Title of article, author, source (e.g., WSJ, 7/29/13, p.
B4), and link to article if possible
How: How does the article relate to the Company or to the
industry?
Why: Your discussion of the article should highlight key
points that relate to the company or the industry and hopefully
to accounting
Effect: For example, did the stock price change after the
event(s) described in the article?
Do NOT copy and paste from the article. Use you own words.
Part 4: Tracking your Company’s stock price
You are tracking your company’s stock price from 9/24/13
through 12/3/13. Thus, this first submission will only include a
partially completed worksheet, e.g., you do not “sell” your
stock. [Please insert your Stock Monitoring Worksheet here –
this should fit on one page. See Blackboard for the actual Excel
template.]
Stock Monitoring Worksheet
Student Name

Student Identification number
section
JACK IN THE BOX Inc.
Transaction Date
Ticker Symbol
Number of shares
Open
High
Low
Close
Adj Close
04-11-2013
JACK
306300
40.67
41.65
40.54
41.55
41.55
01-11-2013
JACK
283700
40.61
40.94
40.27
40.69
40.69
31-10-2013

JACK
160800
40.48
40.95
40.31
40.68
40.68
30-10-2013
JACK
114900
40.68
40.9
40.43
40.55
40.55
29-10-2013
JACK
229700
40.49
40.68
40.42
40.65
40.65
28-10-2013
JACK
176700
40.51
40.68
40.35
40.49
40.49
25-10-2013
JACK
270500
40.35
40.93

40.3
40.51
40.51
24-10-2013
JACK
235000
40.11
40.44
39.88
40.34
40.34
23-10-2013
JACK
176300
40.2
40.55
39.8
40.09
40.09
22-10-2013
JACK
338400
40.59
40.87
40.34
40.55
40.55
21-10-2013
JACK
237900
40.06
40.44
39.72
40.43
40.43
18-10-2013

JACK
243500
40.05
40.19
39.63
39.99
39.99
17-10-2013
JACK
316800
39.1
39.8
38.94
39.78
39.78
16-10-2013
JACK
192900
39.37
39.52
39.1
39.2
39.2
15-10-2013
JACK
174500
39.63
39.63
39.12
39.14
39.14
14-10-2013
JACK
161700
39.6
39.99

39.28
39.73
39.73
11-10-2013
JACK
154400
39.24
39.87
39.18
39.83
39.83
10-10-2013
JACK
188300
39.12
39.52
38.95
39.4
39.4
09-10-2013
JACK
239400
39.03
39.11
38.53
38.77
38.77
08-10-2013
JACK
197200
39.45
39.7
39.01
39.08
39.08
07-10-2013

JACK
260900
40.06
40.22
39.42
39.44
39.44
04-10-2013
JACK
152300
40.24
40.58
40.01
40.33
40.33
03-10-2013
JACK
300400
40.78
41
40.11
40.34
40.34
02-10-2013
JACK
292900
40.46
40.96
40.18
40.76
40.76
01-10-2013
JACK
244400
40
40.67

39.84
40.59
40.59
30-09-2013
JACK
224500
39.85
40.04
39.69
39.99
39.99
27-09-2013
JACK
280600
39.98
40.34
39.98
40.1
40.1
26-09-2013
JACK
345800
39.92
40.19
39.75
40.14
40.14
25-09-2013
JACK
259900
40.28
40.39
39.86
39.92
39.92
24-09-2013

JACK
242200
40.37
40.61
40.06
40.36
40.36
23-09-2013
JACK
300200
40.52
40.54
39.94
40.37
40.37
20-09-2013
JACK
655000
40.47
40.8
40.42
40.58
40.58
19-09-2013
JACK
222200
40.41
40.57
40.27
40.52
40.52
18-09-2013
JACK
221300
40.5
40.56

39.91
40.41
40.41
17-09-2013
JACK
300500
40.15
40.53
39.92
40.49
40.49
16-09-2013
JACK
153800
40.47
40.69
40.2
40.23
40.23
13-09-2013
JACK
254600
40.45
40.5
40.08
40.16
40.16
12-09-2013
JACK
257900
40.3
40.5
40.16
40.25
40.25
11-09-2013

JACK
403300
40.28
40.53
40.17
40.23
40.23
10-09-2013
JACK
340500
39.99
40.39
39.8
40.38
40.38
09-09-2013
JACK
368600
38.95
39.83
38.95
39.75
39.75
Acct 201 Course Project Assignment #2-IND for [insert
company name] page 12
INDIVIDUAL[footnoteRef:1] due 12/10/13 [1: Robert Bowen
and Jane Jollineau of the University of San Diego prepared this
template. Revised: 11/2/13. ]

Learning about your Company, its Financial Statements &
tracking its Stock Price
Your
name
Other team member(s)
Section #
Again, use your Company’s most recent SEC Form 10-K to
answer the questions below in the space provided. You will
need to complete one template for each company. [Search hint:
every item you want may not be where you expect it type in
what you are looking for (e.g., “preferred stock”) into the upper
right hand search window in the 10-K pdf file.]
Part 1: Basic data on your company
Company name
BRINKER INTERNATIONAL, INC
Industry name
Restaurant brands
Part 2: Understanding the financial statements (continued from
Assignment #1-IND)
Part 2A: Inventories
Using your Company’s financial statements, answer the
questions below:

1st Prior Year
Does the Company report Inventories on the balance sheet?
(Yes or No)
Yes
Yes
Do they appear to be manufacturing, retail or some other
inventory accounts?
Retail
Retail
What is the dollar amount of total inventories at yearend?
24,628
25,360
What is the major inventory method (cost-flow assumption),
e.g., FIFO, LIFO, weighted-average?
FIFO
FIFO
If they use LIFO, what would have been the ending balance
under FIFO?
n/a
n/a
Compute inventory turnover for the most recent year.
(Inventory turnover = CGS ÷ Average Inventory) -- see
textbook p. 300
30.34
n/a
Compute days in inventory for the most recent year.
(Days in inventory = 365 ÷ Inventory turnover ratio) -- see
textbook p. 300
12 days
n/a
Part 2B: Accounts Receivable
questions below:

1st Prior Year
Does the Company report Accounts Receivable? (Yes or No)
Yes
Yes
What is the dollar amount of Accounts Receivable, net, at
yearend? (i.e., net of Allowance for Doubtful Accounts)
37,842
43,387
What is the balance in Allowance for Doubtful Accounts at
yearend? (this account may have a different name)
Details not given
Details not given
What is the balance in accounts receivable, gross, at yearend?
(= Accounts Receivable, net, plus Allowance for Doubtful
Accounts)
n/a
n/a
Compute the % of gross Accounts Receivable that management
expects to be uncollectible at yearend
(= Allowance for DA ÷ Accounts Receivable, gross)
n/a
n/a
Compute Accounts Receivable Turnover for the most recent
year. (= Net Sales ÷ Ave net A/R) – see textbook p. 416
70.08
n/a
Compute A/R Collection Period in days for the most recent
year. (= 365 ÷ Accounts Receivable Turnover ratio) – see
textbook p. 416
5.21 (6) days
n/a

Part 2C: Long-lived assets
1st Prior Year
Does the Company report fixed assets (e.g., property, plant &
equipment) on its balance sheet? (Yes or No)
Yes
Yes
What is the balance in Property, Plant & Equipment, net, at
yearend?
1,035,815
1,043,564
What depreciation method is used (e.g., straight-line,
accelerated)?
straight-line basis
straight-line basis
What is the balance in Accumulated Depreciation at yearend?
1,147,895
1,076,238
What is the original cost of the Property, Plant and Equipment
at yearend?
2,183,710
2,119,802
Compute yearend Accumulated Depreciation ÷ the yearend
original cost of PP&E
0.53
0.51
Does the Company report any intangible assets (e.g., Goodwill)
on its balance sheet? (Yes or No)
yes
yes
Compute the ratio of intangible assets to total assets.
(= yearend intangible assets ÷ yearend total assets)
0.1
0.09

Part 2D: Liabilities
questions below:
1st Prior Year
What is the Company’s largest current liability at yearend?
Accrued liabilities
Accrued liabilities
Does the Company report unearned (or deferred) revenue? (Yes
or No)
No
No
What is the total dollar amount of long-term debt at yearend?
780,121
587,890
Compute the debt to total assets ratio (= yearend total liabilities
÷ yearend total assets) – see textbook p. 60
0.9
0.78
Compute times interest earned (= net operating income ÷
interest expense) – see textbook p. 525
8.8 times
8.65 times
Part 2E: Stockholders’ Equity
1st Prior Year
Does the Company report any nonzero amount of preferred
stock? (Yes or No)
no

no
How many common shares are authorized at yearend?
250,000,000
250,000,000
How many common shares are issued at yearend?
176,246,649
176,246,649
What is the total amount of paid-in-capital at yearend?
495,045
484,406
What is the average cost of shares issued at yearend? [= (C/S at
par + addt’l paid-in-capital) ÷ yearend shares issued]
$2.81
$2.75
Does the Company report any treasury stock? If so, how many
shares are held as treasury stock?
108,802,550
101,904,534
How many common shares are outstanding at yearend?
67,444,099
74,342,115
What is the average cost of treasury shares at yearend?
$38.01
$30.77
How much did the Company pay in dividends during the year (if
any)?
56,343
50,081
Compute the Dividend Payout ratio (= cash dividends declared
on C/S ÷ net income) – see textbook p. 594
34.49%
33.12%
Compute Return on Assets [= (net income ÷ average total
assets] – see textbook p. 464
11.30%
n/a

Compute Return on Common Equity [= (net income – preferred
stock dividends) ÷ average common shareholders’ equity] – see
textbook p. 595
71.14%
n/a
Part 2F: Insert your company’s financial statements here – this
should fit on 4 or 5 pages
Include copies of the following financial statements from the
Company’s 10-K – not abbreviated versions from Finance
Yahoo or Google Finance. These should be the same statements
you submitted with your first assignment.
· Balance sheet (may be on two pages)
BRINKER INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
2013
2012
ASSETS

Current Assets:
Cash and cash equivalents
$
59,367
$
59,103
Accounts receivable
37,842
43,387
Inventories
24,628
25,360
Prepaid expenses and other
71,824

66,359
Income taxes receivable
4,930
1,055
Deferred income taxes
0
2,918
Total current assets
198,591
198,182
Property and Equipment:
Land
147,581

152,382
Buildings and leasehold improvements
1,435,426
1,399,905
Furniture and equipment
580,115
556,304
Construction-in-progress
20,588
11,211
2,183,710
2,119,802
Less accumulated depreciation and amortization

(1,147,895
)
(1,076,238
)
Net property and equipment
1,035,815
1,043,564
Other Assets:
Goodwill
142,103
125,604
24,064
20,231
Other
52,030

51,827
Total other assets
218,197
197,662
Total assets
$
1,452,603
$
1,439,408
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current installments of long-term debt
$
27,596

$
27,334
Accounts payable
93,326
100,531
Accrued liabilities
268,444
273,884
845
0
Total current liabilities
390,211
401,749

Long-term debt, less current installments
780,121
587,890
Other liabilities
132,914
139,896
Commitments and Contingencies (Notes 9 and 14)
Shareholders’ Equity:
Common stock—250,000,000 authorized shares; $.10 par value;
176,246,649 shares issued and 67,444,099 shares outstanding at
June 26, 2013 and 176,246,649 shares issued and 74,342,115
shares outstanding at June 27, 2012
17,625
17,625

Additional paid-in capital
477,420
466,781
Retained earnings
2,217,623
2,112,858
2,712,668
2,597,264
Less treasury stock, at cost (108,802,550 shares at June 26,
2013 and 101,904,534 shares at June 27, 2012)
(2,563,311
)
(2,287,391
)
Total shareholders’ equity
149,357

309,873
Total liabilities and shareholders’ equity
$
1,452,603
$
1,439,408
· Income statement
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

Fiscal Years
2013
2012
2011
Revenues:
Company sales
$
2,766,618
$
2,748,462
$
2,685,441
Franchise and other revenues
79,480

72,260
75,945
Total revenues
2,846,098
2,820,722
2,761,386
Operating Costs and Expenses:
Company restaurants
Cost of sales
758,377

769,729
742,283
Restaurant labor
892,413
891,910
886,559
Restaurant expenses
655,214
649,830
655,060
Company restaurant expenses
2,306,004

2,311,469
2,283,902
Depreciation and amortization
131,481
125,054
128,447
General and administrative
134,538
143,388
132,834
Other gains and charges
17,300

8,974
10,783
Total operating costs and expenses
2,589,323
2,588,885
2,555,966
Operating income
256,775
231,837
205,420
Interest expense
29,118

26,800
28,311
Other, net
(2,658
)
(3,772
)
(6,220
)
Income before provision for income taxes
230,315
208,809
183,329
Provision for income taxes
66,956
57,577

42,269
Net income
$
163,359
$
151,232
$
141,060
Basic net income per share
$
2.28
$
1.93

$
1.55
Diluted net income per share
$
2.20
$
1.87
$
1.53
Basic weighted average shares outstanding
71,788

78,559
90,807
Diluted weighted average shares outstanding
74,158
80,664
92,320
Dividends per share
$
0.80

$
0.64
$
0.56
· Statement of Cash Flows
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Fiscal Years
2013
2012

2011
Cash Flows from Operating Activities:
Net income
$
163,359
$
151,232
$
141,060
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
131,481
125,054

128,447
Restructure charges and other impairments
11,425
10,396
8,427
(4,793
)
11,808
15,277
Net (gain) loss on disposal of assets
(6,905
)
490

(401
)
Stock-based compensation
15,909
13,461
12,789
Loss (Earnings) on equity investments
851
1,350
(1,802
)
Other
363
799
405

Changes in assets and liabilities:
Accounts receivable
5,398
608
1,255
Inventories
908
(15
)
1,341
Prepaid expenses and other
82
(2,984

)
(2,150
)
Other assets
(4,115
)
489
406
Current income taxes
749
(3,874
)
(3,976
)
Accounts payable
(9,339
)
12,188
(21,515
)
Accrued liabilities

(9,995
)
(17,197
)
(15,178
)
Other liabilities
(4,690
)
(367
)
(4,397
)
Net cash provided by operating activities
290,688
303,438
259,988
Cash Flows from Investing Activities:
Payments for property and equipment

(131,531
)
(125,226
)
(70,361
)
Payments for purchase of restaurants
(24,622
)
(3,120
)
0
Proceeds from sale of assets
17,157
8,112
8,696
Insurance recoveries
1,152
0

0
Investment in equity method investees
0
(3,170
)
(2,896
)
Net cash used in investing activities
(137,844
)
(123,404
)
(64,561
)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt
549,528

70,000
0
Purchases of treasury stock
(333,384
)
(287,291
)
(422,099
)
Payments on long-term debt
(316,380
)
(18,749
)
(16,127
)
Payments on revolving credit facility
(150,000
)
0
0

Borrowings on revolving credit facility
110,000
40,000
0
Payments of dividends
(56,343
)
(50,081
)
(53,185
)
Proceeds from issuances of treasury stock
41,190
43,416
33,057
Excess tax benefits from stock-based compensation
8,778

1,406
291
Payments for deferred financing costs
(5,969
)
(1,620
)
0
Net cash used in financing activities
(152,580
)
(202,919
)
(458,063
)
Net change in cash and cash equivalents
264
(22,885
)

(262,636
)
Cash and cash equivalents at beginning of year
59,103
81,988
344,624
Cash and cash equivalents at end of year
$
59,367
$
59,103
$
81,988
· Statement of Changes in Stockholders’ Equity

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’
EQUITY
(In thousands)

Common Stock
Additional
Paid-In
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Total
Shares
Amount

Balances at June 30, 2010
101,572
$
17,625
$
465,721
$
1,923,561
$
(1,678,159
)
$
0
$
728,748
Net income and comprehensive income
0

0
0
141,060
0
0
141,060
Dividends ($0.56 per share)
0
0

0
(51,432
)
0
0
(51,432
)
0
0
13,381
0
0

0
13,381
(20,585
)
0
(1,788
)
0
(420,311
)
0
(422,099
)

Issuances of common stock
1,951
0
(9,821
)
0
42,878
0
33,057
Excess tax shortfall from stock-based compensation
0
0

(3,805
)
0
0
0
(3,805
)
82,938
17,625
463,688
2,013,189

(2,055,592
)
0
438,910
0
0
0
151,232
0
0

151,232
0
0
0
(51,563
)
0
0
(51,563
)
0

0
13,461
0
0
0
13,461
(10,966
)
0
(2,901
)
0

(284,390
)
0
(287,291
)
2,370
0
(9,175
)
0
52,591
0

43,416
Excess tax benefit from stock-based compensation
0
0
1,708
0
0
0
1,708
74,342

17,625
466,781
2,112,858
(2,287,391
)
0
309,873
0
0
0

163,359
0
0
163,359
0
0
0
(58,594
)
0

0
(58,594
)
0
0
16,610
0
0
0
16,610

(9,176
)
0
(5,565
)
0
(327,819
)
0
(333,384
)
2,278
0

(10,709
)
0
51,899
0
41,190
Excess tax benefit from stock-based compensation
0
0
10,303
0

0
0
10,303
67,444
$
17,625
$
477,420
$
2,217,623
$
(2,563,311
)

$
0
$
149,357
Part 3: Discussion of a news article about the Company
Insert your second article discussion for this company here –
this should fit on one page. (You turned in the first article with
Assignment #1.) Again, please use a news article rather than an
opinion piece from a blog such as Seeking Alpha.
Description of Article discussion (same as in Assignment #1-
IND but with a different article)
Include one article summary for each company in the group (for
a total of four-to-six article summaries depending upon how
many members are in your group). The articles should be dated
no earlier than June 1, 2013. Summarize the news article and
its impact on your company or the industry (and perhaps the
company’s stock price). Each article summary should include
(at least) the following (at a minimum):

Citation: Title of article, author, source (e.g., WSJ, 7/29/13, p.
B4), and link to article if possible
How: How does the article relate to the Company or to the
industry?
Why: Your summary of the article should highlight key
points that relate to the company or the industry and hopefully
to accounting
Effect: For example, did the stock price change after the
event(s) described in the article?
Do NOT copy and paste from the article. Use you own words.
Part 4: Tracking your Company’s stock price
You are tracking your company’s stock price from 9/24/13
through 12/3/13. This final submission should have a
completed worksheet. [Complete your Stock Monitoring
Worksheet by “selling” your stock at the adjusted closing price
on December 3rd as shown below. See Blackboard for the
actual Excel template. Paste a screenshot of your completed
spreadsheet here.]

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