Serial Case C12-71 (Learning Objectives 4, 5: Calculate and analyze ratios and ea company in the restaurant industry) and analyze ratios and earnings quality fo Note: This case is part of The Cheesecake Factory serial case contained in textbook every chapter in To follow are The Cheesecake Factory Incorporated's financial statements from its Form 10-K s from its 2016 A1 The Cheesecake Factory Incorporated Consolidated Statements of Income: Condensed and adapted for educational use In thousands) Fiscal Year 2016 2015 2014 2013 4 Revenues 5 Costs and $ 2275719 $ 2,100,609 $ 1976624 $ 1877 910 ex sa 526,628 504,031 490,306 455 665 759998 684818 646102 603 069 82,835 78558 Cost 7 Labor expenses 88010 660,951 700,090 | 85,563 | 612.650 | o 200,9935.894138,54442 Depreciation and amortization expense 9 Other expenses 10 Total costs and expenses 11 Income from operations 2074726 1935,363 1.831893 1716958 144731 160,954 12 Interest and other expense, net 13 Income before income taxes (9,225)() 5,894 6,187 | 191.768 14 Income tax expense 15 Net income 138,544 156450 42,829 3114356 52274 159352 52,274 494 S 116,523 S 101.276 16 17 Note Financial information presented here should not be used for investment decisions 18 Data from the U.S. Securities and Exchange Commission EDGAR Company filings. www.sec gov Consolidated Balance The Cheesecake Factory Sheets: Condensed and adapted for except share data) January 3, 2017 December 29,2015 December 30, 2014 sets assets Cosh and cash equivalents Accounts 854 14159 18.739 2,658 15,632 58,018 15,170 other expenses current assets 4926 438 33255 and equipment, net 0781 6212 46,881 Total other assets Total assets Liabilities and Stockholders E 2Corrent labilt Accounts payable Noncurrent liabilitie Stockholders equity Preferred stock 294581 stock 7413 23801 654.033 211 stock here should not be used for investment decisions ecenibies and Exchange Commissicn EDGAR Compary filings www.so go preceding financial statements have been condensed and adapted for educational use and uld not be used for investment decisions. Requirements slate The Cheesecake Factory's net working capital for 2015 and 2016. What does the ae ing capital figure mean? Did The Cheesecake Factory's net working capital et working or decrease from 2015 to 2016? Explain. The hCheesecake Factory's current ratio for 2015 and 2016. Did the curent ratio mrone o he Cheesecake Factory's quick ratio for 2015 and 2016. Did the quick ratio improve or deteriorate? How would you assess ventory turnover for 2016. Next, cakculate days' inventory out this number mean? Eyo ass The Cheesecake Factory's overall biltyto ay it ureat revenue is from credit Calculate accounts able outstanding ales. Next, calculate Nest caes reeivable turnover for 2016. Assume all net sales outstanding. What does this number mean? 1 Calculate accounts Pu mean? does this number doesnts payable turnover for 2016. Next, calculate days 8. Calculate the cash conversion cycle (in days). Explain what this cash conversion cycle number means. 9. Calculate the debt ratio for 2016 and for 2015. Has the debt ratio increased or decreased? 10. Calculate the times-interest-earned ratio for 2016. Use "interest and other expense, net as interest expense. What does this ratio mean? 11. Calculate the following profitability ratios for 2016: a. Gross margin percentage b. Operating income percentage c. Rate of return on sales d. Rate of return on assets 12. Comment on The Cheesecake Factory's profitability in 2016 based on the profitability ratios you just calculated. 13. How would you evaluate the company's earnings quality
