1) If you were a financial institution, would you loan money to provide Panera with the additional debt they need? Why or why not? If banks are willing to loan up to 3 times a companys prior year EBITDA, how much in loans could Panera potentially receive?

Exhibit 1 PANERA BREAD COMPANY Historic Income Statements n thousands of dollars 2004 2005 2003 2006 Cafes(a) 602 741 877 1027 Number of Bakery Revenue 363 702 479,139 640 275 828 971 Costs of Goods sold Cafe 210,822 288,706 399,760 5429 16 Bakery Dough Sold to Franchisees 54,967 65,627 75,036 85,618 18,304 25 298 33,011 44.166 Depreciation 31,502 38 735 50 240 63,502 General and Administrative (b) 315,595 418,366 558,047 736 202 Operating Profit (EBIT 48,107 60,773 82,228 92,769 92 Interest Expense 48 18 50 48,059 60,755 82,178 92677 Pretax Profit 17,629 22,175 29,995 33,827 Tax Net Income 30,430 38,580 52,183 58,850