Minicase 2 Bob Evans Farms, Inc.}
Bob Evans Farms, Inc., operates 315 restaurants in 19 states and produces fresh and fully cooked sausage products, fresh salads, and related products distributed to grocery stores in the Midwest, Southwest, and Southeast. For a recent 3-year period Bob Evans Farms reported the following selected income statement data (in millions of dollars):

In his letter to the stockholders, the chairman of the board and CEO made the following comments: "I am looking forward to a record-setting year at Bob Evans Farms. We have excellent leadership in place, great traditions on which to build, and the teamwork and knowledge to move ahead."
\section*{Instructions}

(a) Compute the percentage change in sales and in net income from 1993 to 1994.

(b) What contribution, if any, did the company's gross profit rate make to the improved earnings?

(c) What was Bob Evans's percentage of net income to net sales in each of the three years? Comment on any trend in this percentage.

(d) Based on the trends in these ratios, does the CEO's optimism seem appropriate?

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1994 1993 1992 Sales $699.0 $653.2 $556.3 Cost of goods sold 514.4 480.3 424.3 Selling and administrative expenses 85.0 83.6 72.0 Net income 48.2 43.1 39.3