P$13-9($Algo$)$ Computing and Analyzing Ratios LO $13-4,13-5,13-6,13-7,13-8$

The financial statements for Lainey$$s Famous Pizza are below. Lainey$$s operates more than $250$ locations in $30$ states and $11$ countries.

LAINEY$$S FAMOUS PIZZA, INCOPRORATED AND SUBSIDIARIES

Consolidated Statements of Operations

$($amounts in thousands, except for per share data$)$

Year $3$ Year $2$ Year $1$

Revenues:

Restaurant sales $ $738,906$ $ $653,485$ $ $666,916$

Royalties from licensing agreement $6,3829,0396,970$

Domestic franchise revenues $3,3603,3343,407$

International franchise revenues $2,6632,3383,421$

Total revenues $751,311668,196680,714$

Costs and expenses:

Food, beverage, and paper supplies $184,732156,781166,176$

Labor $273,133248,650247,926$

Direct operating and occupancy $168,420143,273141,017$

Cost of sales $626,285548,704555,119$

General and administrative $50,99146,95652,292$

Depreciation and amortization $37,26640,57140,949$

Pre$-$opening costs $3,5291,9735,128$

Loss on impairment of property and equipment $18,96224,24113,986$

Store closure costs $1,9686041,683$

Litigation, settlement, and other costs $9,0191,7391,386$

Total costs and expenses $748,020664,788670,543$

Operating income $3,2913,40813,031$

Interest expense, net $427751,714$

Income before income tax $3,2492,63311,317$

Income tax $($benefit$)/$provision $(4,279)(2,221)3,045$

Net income $ $7,528$ $ $4,854$ $ $8,272$

Net income per common share:

Basic $ $0\mathrm{.}30$ $ $0\mathrm{.}19$ $ $0\mathrm{.}34$

Diluted $ $0\mathrm{.}30$ $ $0\mathrm{.}19$ $ $0\mathrm{.}34$

Weighted average shares used in calculating net income per common share:

Basic $25,13825,36425,843$

Diluted $25,13824,79325,861$

LAINEY$$S FAMOUS PIZZA, INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheets

$($in thousands, except for share data$)$

Year $3$ Year $2$

Assets

Current assets:

Cash and cash equivalents $ $21,620$ $ $27,404$

Receivables $14,84413,841$

Inventories $7,3878,157$

Current deferred tax asset, net $9,3958,376$

Prepaid rent $4267,557$

Other prepaid expenses $3,2982,681$

Total current assets $56,97068,016$

Property and equipment, net $253,046258,016$

Noncurrent deferred tax asset, net $23,40126,311$

Goodwill $4,8825,272$

Other intangibles, net $5,4875,364$

Other assets $9,6138,209$

Total assets $ $353,399$ $ $371,188$

Liabilities and stockholders$$ equity

Current liabilities:

Accounts payable $ $18,635$ $ $12,563$

Accrued compensation and benefits $24,96324,501$

Accrued rent $22,37421,887$

Deferred rent credits $4,8385,045$

Other accrued liabilities $14,99013,515$

Gift card liability $15,35721,940$

Store closure reserve $119391$

Total current liabilities $101,27699,842$

Long$-$term debt $-23,600$

Other liabilities $10,14610,328$

Deferred rent credits, net of current portion $34,47733,778$

Income taxes payable, net of current portion $34511,725$

Commitments and contingencies $--$

Stockholders$$ equity:

Common stock$$$$0\mathrm{.}01$ par value, $80,000,000$ shares authorized, $31,100,000$ and $30,700,000$ shares issued and outstanding at end of Year $3,$ and Year $2,$ respectively $311307$

Additional paid$-$in capital $183,008175,300$

Retained earnings $23,83616,308$

Total stockholders$$ equity $207,155191,915$

Total liabilities and stockholders$$ equity $ $353,399$ $ $371,188$

Required:

$1.$ Compute the following ratios for Year $3$ using information from the company$$s financial statements. Assume a market price per share of $$1\mathrm{.}53.$

Note: Round your answers to $2$ decimal places. Enter percentage answers rounded to $2$ decimal places $($i$.$e$.0\mathrm{.}1234$ should be entered as $12\mathrm{.}34).$Answer is not complete.