Book: Financial management 1. Review the requirements of the Chapter 3 Mini-Case, parts b through j. Then apply those requirements to do an analysis of Brinker International, which is a real company. Don't complete the minicase itself, just Brinker. Do the analysis on the basis of the figures for the most recent year. For part g, use the 2 most recent years. Download 10K financial statements for the most recent year for Brinker. A good source is the company's home page. Also compare the Brinker ratios to the industry averages and commend on significant differences. You'll note that some of the company's ratios you calculate won't agree with those found on the web page. Ratios are calculated in different ways, however, you should use the formulas in the text. Also, you won't find all of the industry averages, but you will find most of them. You'll need the company's stock price for several of the ratios; use the fiscal year end price. The company's stock symbol is EAT. (Visit Brinker web site) (Links to an external site.) (Access industry averages) (Links to an external site.) Note: All quantitative work must be done in Excel; Word is not acceptable. You can download Brinker's 10K (annual financial statements they send the Securities and Exchange Commission each year) at the following site: http://phx.corporate-ir.net/phoenix.zhtml?c=119205&p=irol-sec You then need to take the various items off the financial statements such as Revenues, Inventory, etc. and calculate the ratios to answer the case questions. b. calculate the 2014 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the companys liquidity position in 2012, 2013, and as projected for 2014? We often think of rations as being useful 1. To managers to help run the business, 2. To bankers for credit analysis, and 3. To stockholders for stock valuation. Would these different types of analysts have an equal interest in the liquidity ratios? c. Calculate the 2014 inventory turnover, days sales outstanding, fixed assets turnover, and total assets turnover. How does Brinker utilization of assets stack up against that of other firms in its industry? d. calculate the 2014 debt ratio, liabilities to assets ratio, times-interest-earned, and EBITDA coverage ratios. How does Brinker compare with the industry with respect to financial leverage: what can you conclude from these ratios: e. Calculate the 2014 profit margin, basic earning power, return on assets, and return on equity. What can you say about these ratios? f. Calculate the 2014 price/earnings ratio, price/cash flow ratio, and market/book ratio. Do these ratios indicate the investors are expected to have a high or low opinion of the company? g. Perform a common size analysis and percentage change analysis. What do these analyses tell you about Brinker?

S.NO Details 2014 2013 2012 1 Current Assets 210854 198591 198182 2 Inventory 23643 24628 25360 3 Current Liabilities 466110 391232 401749 4 Total Sales 2823069 5 Total Assets 1490604 6 Fixed Assets 1056454 7 Account receivable 47850 8 Total outsider debts 1427510 9 Net Profit 154039 10 Shareholders equity 63094 S.No Ratio Formula 2014 2013 2012 1) Current Ratio Current asset/Current Liabilities 0.4524 0.5076 0.4933 2) Quick Ratio Quick Asset/Current Liabilities 0.4016 0.4447 0.4302 Quick Assets = Current Assets - Inventory 187211 173963 172822 3) No of days sales outstanding (Account receivable/Credit sale)*360 6.102 Remarks : 1) Assuming that there are 360 working days in a year 2) All the sale revenue assumes to be credit sale. 4) Inventory Turnover Sales/Inventory 119.40 5) Fixed Asset turnover Fixed Asset/Net Sales 0.3742 6) Total Asset turnover Total Asssets/Net Sales 0.5280 7) Debt Ratio Total debts/Total assets 0.9577 8) Profit margin Net profit/Total Sales 5.30% 9) Return on Assets Net profit/Total Assets 10.33% 10) Return on equity Net profit/Shareholders equity 2.441