10.10.14

Panera Bread Company (PNRA) operates over 2,000 bakery-cafe locations throughout the United States and Canada and serves over 9 million customers per week. Paneras operations are divided into the following segments:

• Company-Operated Bakery-Cafes
• Franchised Bakery-Cafes
• Fresh Dough and Other Products

The Fresh Dough and Other Products segment supplies fresh dough, produce, tuna, and other products to the company-operated and franchised cafes. Recent data (in millions) for each of these segments are as follows:

	Company-Operated Cafes		Franchised Cafes		Fresh Dough
Revenues	$2,434		$155		$408
Operating income	398		150		28
Invested assets	943		18		87

a. Determine the profit margin for each segment. Round to one decimal place.

	Profit margin
Company-Operated	____%
Franchised	____%
Fresh Dough	____%

b. Determine the investment turnover for each segment. Round to two decimal places.

	Investment Turnover
Company-Operated	____
Franchised	____
Fresh Dough	____

c. Use the DuPont formula to determine the return on investment for each segment. Round to one decimal place.

	Return on Investment
Company-Operated	_____%
Franchised	____%
Fresh Dough	_____%

The condensed income statement for the Panera of Tri-State Industries Inc. is as follows (assuming no support department charges):

Sales	$200,000,000
Cost of goods sold	107,900,000
Gross profit	$92,100,000
Administrative expenses	66,900,000
Operating income	$25,200,000

The manager of the Panera is considering ways to increase the return on investment.

Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $140,440,000 of assets have been invested in the Consumer Products Division. Round your answers for the profit margin and the rate of return on investment to the nearest whole number, round your answer for the investment turnover to two decimal places.

Profit margin	____%
Investment turnover	_____
Rate of return on investment	____%

If expenses could be reduced by $3,400,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Round your answers for the profit margin and the rate of return on investment to the nearest whole number, round your answer for the investment turnover to two decimal places.

1. Profit margin	____%
   Investment turnover	___
   Rate of return on investment	___%