Domino's Inc. and Papa John's International Inc. are the two largest pizza delivery companies in the United

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Domino's Inc. and Papa John's International Inc. are the two largest pizza delivery companies in the United States. Both companies have both company-owned and franchise store locations, featuring a delivery-oriented store design. Franchised restaurants are owned by other entities that pay fees to the franchiser based upon franchise contract provisions. The accounts receivable are associated with these fees. Comparative condensed income statements for a recent fiscal year for both companies are as follows:


Domino's Inc. and Papa John's International Inc. are the two


Average balances from comparative balance sheets for both companies were as follows for a recent year (in millions):

Domino's Inc. and Papa John's International Inc. are the two


1. Prepare a common-size income statement for both companies. Round to one decimal place.
2. Determine the DuPont formula for each company. Round to two decimal places.
3. Calculate the accounts receivable, inventory, and fixed asset turnover for each company. Round to two decimal places.
4. Analyze and compare the two companies, based on your answers in parts (1) through(3).

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Financial Accounting An Integrated Statements Approach

ISBN: 978-0324312119

2nd Edition

Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren

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