358 Chapter 6 APPLY YOUR KNOWLEDGE Serial Case LO 1.4 ined in every chapter in the C6-82 (Learning Objectives 1.4: Analyze inventory and gross profit of a company in the restaurant industry) Chapter Note: This case is part of The Cheesecake Factory serial care conned in textbook The Cheesecake Factory Incorporated (NASDAQ: CAKE) operates over 200 restaura and the bakeries in the United States. In its two bakeries, it bakes and prepares ore than 70 desserts, both for its own use in its restaurants and for sale to a wide variety of wholesal ers and retailers. The Cheesecake Factory's inventories consist of restaurant food and sunni bakery raw materials, and bakery finished goods. To account for its inventory, the com the average-cost method at its restaurants and the FIFO method at its bakeries The Cheesecake Factory Incorporated's financial statements from its 2016 Form 10-K are mentors, the company follows: 2014 The Cheesecake Factory Incorporated Consolidated Balance Sheets: Condensed and adapted for educational use in thousands, except share data) January 3, 2017 December 29, 2015 Assets 53,839 15,632 $ 45 14159 Cash and cash equivalents Accounts receivable Income tax receivable Other receivables 64 5921 34,926 52/438 221,427 910,134 41995 2296 892,191 23,054 42.162 96,542 161.758 1.292.319 21972 US 46.906 $ 120.346 Prepaid expenses Total current assets 12 Property and equipment, net 1) Other assets Intangible assets.net Prepaid rent Other assets Total other assets Total assets Liabilities and Stockholders' Equity 21 Current liabilities Accounts payable Other accrued expenses Total current abilities 25 Noncurrent liabilities 26 Stockholders' equity Preferred stock Common stock Additional paid-in-capital Retained earnings 31 Treasury stock Total stockholders equity Total liabilities and stockholders' equity 35 Note Financial information presented here should not be used for investment decisions 41,5649 334.962 376526 313,586 47.770 302.456 390225 294581 911 947 774 137 1.238,012 (1.409,8891 603.207 1.293319 710202 1140738 01261 582532 127 Source: Dua fom the US Securities and Exchange Commi EDGAR C y lings, www The Cheesecake Factory Incorporated Consolidated Statements of Income: Condensed and adapted for educational use (in thousands) Fiscal Year 2015 2,100,609 2016 2.275,719 $ $ $ 2014 1,976,624 5 Revenues 6 Costs and expenses: Cost of sales 8 Labor expenses 9 Depreciation and amortization expense 10 Other expenses 11 Total costs and expenses 12 Income from operations 13 Interest and other expense, net 14 Income before income taxes 15 Income tax expense 16 Net income 18 Note: Financial information presented here should not be used for investment decisions 19 526,628 759,998 88,010 700.090 2,074726 200,993 19.225) 191.768 52.274 139494 504,031 684,818 85,563 660,951 1.935,363 165,246 (5.894 | 159,352 42.829 116.523 490,306 646,102 82,835 612,650 1,831,893 144731 16,187) 138,544 37.268 101.276 $ S $ 4. Calculate The Cheesecake Factory's gross profit percentages for 2016 and 2015. Did its gross profit percentage improve or deteriorate from 2015 to 2016? 1 1 1