Don't include in a word document please show in an excel spreadsheet.

Case 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 comment 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. Show how each answer is derived. Word is not acceptable.

Include the balance sheet and income statement on the same worksheet as ratio calculations.

b. calculate the 2017 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company?s liquidity position in 2015, 2016, and as projected for 2017? 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 2017 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 2017 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 2017 profit margin, basic earning power, return on assets, and return on equity. What can you say about these ratios?

f. Calculate the 2017 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?

h. use the extended DuPont equation to provide a summary and overview of Brinker?s financial condition as projected for 2017. What are the firm?s major strengths and weaknesses?

i. What are some potential problems and limitations of financial ratio analysis?

j. What are some qualitative factors that analysts should consider when evaluating a company?s likely future financial performance.

Case 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 comment 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. Show how each answer is derived. Word is not acceptable. Include the balance sheet and income statement on the same worksheet as ratio calculations. b. calculate the 2017 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company's liquidity position in 2015, 2016, and as projected for 2017? 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 2017 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 2017 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 2017 profit margin, basic earning power, return on assets, and return on equity. What can you say about these ratios? f. Calculate the 2017 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? h. use the extended DuPont equation to provide a summary and overview of Brinker's financial condition as projected for 2017. What are the firm's major strengths and weaknesses? i. What are some potential problems and limitations of financial ratio analysis? j. What are some qualitative factors that analysts should consider when evaluating a company's likely future financial performance. A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 B C D E EXAMPLE FACTS Cost of milling machine Modifications to machine MACRS 3 year class Salvage after 3 years Increase NWC Savings per year Tax rate Depreciable Base Depreciable base Increase in NWC Net Cost at time 0 $ $2,000,000 55,000 $ 0.3333 250,000 20,000 650,000 30% 2,055,000 (cost + modifications) $ $ $ 2,055,000 20,000 2,075,000 $ $ $ Determine operating cash flows Savings Depreciation EBT Taxes Operating income Add back depreciation Net operating cash flows $ $ $ $ $ $ 650,000 (684,932) (34,932) $10,479 (24,452) 684,932 660,479 $ $ $ $ $ $ 0.4445 650,000 (913,448) (263,448) $79,034 (184,413) 913,448 729,034 Determine terminal year cash flow Sale of machine Book value Capital gain Taxes Return of NWC CF 0.1481 $ $ $ 650,000 (304,346) 345,655 ($103,696) 241,958 304,346 546,304 $ $ $ 250,000 (29,317) 20,000 240,683 $ Should project be accepted? Cost of capital 12% Cash flows: Year 0 Year 1 $ (2,075,000) $ Year 2 660,479 $ Year 3 729,034 $ NPV IRR MIRR 786,986 ($343,943.26) 2.4% 5.43% No, do not purchase. NPV negative, IRR and MIRR lower than cost of capital. Brigham 14e Page 1 of 4 01/11/2017 A B C D E 49 Brigham 14e Page 2 of 4 01/11/2017 F 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 0.0741 $ Brigham 14e (152,276) 152,276 97,725 Page 3 of 4 01/11/2017 F 49 Brigham 14e Page 4 of 4 01/11/2017