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.

b. Calculate the projected profit margin, operating profit margin, basic earning power (BEP), return on assets (ROA), and return on equity (ROE). What can you say about these ratios?

c. Calculate the projected inventory turnover, days sales outstanding (DSO), fixed assets turnover, and total assets turnover. How does Computron's utilization of assets stack up against that of other firms in its industry? 1

d. Calculate the projected current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company's liquidity position and its trend?

e. Calculate the projected debt ratio, debt-to-equity ratio, liabilities-to-assets ratio, times-interest-earned ratio, and EBITDA coverage ratios. How does Computron compare with the industry with respect to financial leverage? What can you conclude from these ratios?

f. Calculate the projected price/earnings ratio and market/book ratio. Do these ratios indicate that 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 Computron?

h. Use the extended DuPont equation to provide a breakdown ofComputron's projected return on equity. How does the projection compare with the previous years and with the industry's DuPont equation?

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?

• (Visit Brinker web site) (http://www.brinker.com/)
• (Access industry averages) (https://www.investing.com/equities/brinker-international-inc-ratios )

Note:

• Complete problems and other quantitative work in Excel; Word is not acceptable.
• Show how you derive each answer. If you use a formula, I can place the cursor over your answer and see how you derived the answer. If you do a calculation manually, enter each input, result and solution in a separate cell. Alternatively, you may use a financial calculator, but must show the keystrokes on your Excel worksheet and enter each input, result, and solution in a separate cell. Narrative may be completed in Excel (use text boxes or merge cells) or Word.