Obtain the 2004, 2005, 2006, 2007, and 2008 income statements for Papa John's International, Inc. The 20062008

Obtain the 2004, 2005, 2006, 2007, and 2008 income statements for Papa John's International, Inc. The 2006–2008 statements are included in Papa John's 2008 annual report and Form 10-Ks. The 2004 and 2005 statements are in its 2005 annual report.

To obtain the Form 10-Ks you can use either the EDGAR system following the instructions in Appendix A, or they can be found under "Investors" link on the company's corporate website; www.papajohns.com. The company's annual reports are also available on its website.

Required

a. Compute the percentage change for each of the following categories of revenues and expenses for 2004 to 2005, 2005 to 2006, and 2006 to 2007:

Domestic revenues:

Company-owned restaurant sales

Domestic company-owned restaurant expenses:

Cost of sales

Salaries and benefits

Advertising and related costs

Occupancy costs

Other operating expenses

Using an Excel spreadsheet will make this task much easier. Once these averages are obtained, (you should have three averages for each of the six revenue and expense items), calculate an average of the changes for each item. The answer for the "Occupancy coats" item is show as an example:

Percentage Change

2004–2005 .......1.7%

2005–2006 .......3.2

2006–2007 .................17.0

Average of the changes ..7.3%

b. Prepare a budgeted income statement for 2008 and compare the budgeted data to the actual results for 2008. To calculate budgeted amounts, multiply the average change in each revenue and expense item, from Requirement b, by the dollar amount of the corresponding revenue or expense from 2007. This will represent the budgeted amount for that item for 2008. Don't forget to use decimal data and not percentage data. Subtract the actual 2008 results from the budgeted results. Finally, divide the actual versus budgeted difference by the budgeted amount to determine a percentage variance from the budget. Calculate total for "Total domestic company-owned restaurant expenses" by adding the appropriate items. The answer for the "Occupancy costs" item is show as an example: (Dollar amounts are inthousands.)

Transcribed Image Text:

(5 +3) Percentage Actual Change Budget Actual Variance from Budget Occupancy costs $31,866 1.073 S34,192 $34,973 s(781) .028 [2.8%] Average (1x 2) 3-year 2007 2008 3-4) 4 Variance