Kansas Pizza Pantry opened its first restaurant in Lawrence, Kansas in 1985. Almost immediately after the first location opened, it expanded from Kansas Pizza Pantry to more than 250 locations in more than 30 states and 11 countries. Kansas Pizza Pantry completed an initial public offering in August 2000. Several years ago, Silver Capital completed the acquisition of Kansas Pizza Pantry and, as a result of the acquisition, the company's common stock is no longer publicly traded. Year 1 4,640 $666,316 6,790 3, 107 2,821 679,034 KANSAS PIZZA PANTRY, INC., AND SUBSIDIARIES Consolidated Statements of Operations (amounts in thousands, except for per share data) Year 3 Year 2 Revenues : Restaurant sales $628,827 $652,885 Royalties from licensing agreement 6,962 8,439 Domestic franchise revenues 3,034 International franchise revenues 3,453 2,218 Total revenues 643,882 666,576 Costs and expenses: Food, beverage and paper supplies 150,132 155,581 Labor 237,483 248,050 Direct operating and occupancy 143,120 142,673 Cost of sales 530,735 546,304 General and administrative 50,871 48,726 Depreciation and amortization 37,216 40,391 Pre-opening costs 3,409 1,913 Loss on impairment of property and equipment 19,052 23,641 Store closure costs 1,778 574 Litigation, settlement and other costs 8,969 1,679 Total costs and expenses 652,030 663,228 Operating (loss)/income (8,148) 3,348 Interest expense, net (30) (781) (Loss)/income before income tax (benefit)/provision (8,178) 2,567 Income tax (benefit)/provision (4,999) (2,161) Net (loss) /income $ (3,179) $ 4,728 Net (loss)/income per common share: Basic $ (0.09) $ 0.19 Diluted $ (0.09) 0.19 Weighted average shares used in calculating net (loss)/income per common share: Basic 24,838 24,764 Diluted 24,838 24,493 165,876 247,626 140, 717 554,219 51,992 40,649 4,828 13,686 1,383 1,086 667,843 12,731 (1,534 11,197 2,745 $ 8,452 $ $ 0.34 0.34 25,543 25,561 Year 2 $ 24,644 13,241 6,957 7,776 6,357 2,381 61,356 256,816 25,711 4,972 5,064 7,609 $361,528 KANSAS PIZZA PANTRY, INC., AND SUBSIDIARIES Consolidated Balance Sheets (in thousands, except for share data) Year 3 Assets Current assets: Cash and cash equivalents $ 10,386 Other receivables 13,344 Inventories 6,667 Current deferred tax asset, net 8,855 Prepaid rent 336 Other prepaid expenses 2,938 Total current assets 42,526 Property and equipment, net 242,846 Noncurrent deferred tax asset, net 22,801 Goodwill 4,762 Other intangibles, net 5,187 Other assets 9,013 Total assets $327,135 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 17,915 Accrued compensation and benefits 24,183 Accrued rent 21,474 Deferred rent credits 4,478 Other accrued liabilities 14,390 Gift card liability 14,997 Store closure reserve 89 Total current liabilities 97,526 Long-term debt Other liabilities 10,026 Deferred rent credits, net of current portion 33,877 Income taxes payable, net of current portion 333 Commitments and contingencies Stockholders' equity: Common stock-$0.01 par value, 80,670,000 shares authorized, 28,100,000 and 27,700,000 shares issued and outstanding at end of Year 3, and Year 2, respectively 281 Additional paid-in capital 172,563 Retained earnings 12,529 Total stockholders' equity 185,373 Total liabilities and stockholders' equity $327,135 $ 11,963 23,901 20,687 4,445 12,315 21,340 361 95,012 23,000 9,128 33,178 10,525 277 174,700 15,708 190,685 $361,528 Required: 1. Compute the following ratios for Year 3 using information from the company annual report that was issued before Kansas Pizza Pantry was acquired. Assume a market price per share of $1.35. (Round your answers to 2 decimal places. Enter percentage answers rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34). Negative amounts should be indicated by a minus sign.) a. % Return on equity Net profit margin b. % c Inventory turnover d. Current ratio e Quick ratio f. Debt-to-equity ratio Price/earnings ratio g