The following information concerns seven US companies operating solely or mainly restaurants.
McDonald€™s Corporation
McDonald€™s Corporation franchises and operates McDonald€™s restaurants in the food service industry. These restaurants serve a limited, value-priced menu in more than 100 countries globally. The restaurants are operated either by the company or by franchisees under franchise arrangements, and foreign-affiliated markets and developmental licensees under license agreements. Extracted from the consolidated balance sheet and income statement (annual report 2010) the following data are provided.

There is no Note to the financial statements indicating the detail of inventory.
Benihana
Benihana operates a teppanyaki-style Japanese restaurants in the United States. The company also operates other Asian restaurant concepts, which include RA Sushi and Haru. Its Benihana restaurants offer fresh steak, chicken and seafood. RA Sushi concept provides sushi and Pacific-Rim dishes, and Haru concept features Japanese and Japanese fusion dishes. From the consolidated balance sheet and income statement (annual report 2011), the following data were extracted

A Note to the financial statements indicates that inventory consists principally of restaurant operating supplies (000$ 2,779) and food and beverage (000$ 2,889). The company has a 52/53-week fiscal year. The company€™s first fiscal quarter consists of 16 weeks and the remaining three-quarters are 12 weeks each, except in the event of a fifty-three week year with the final quarter composed of 13 weeks. Because of the differences in length of these accounting periods, results of operations between the first quarter and the later quarters of a fiscal year are not comparable.
Darden Restaurant Inc.
Darden Restaurants, Inc. (Darden) operates a full-service restaurant company and served more than 400 million meals during the fiscal year ended 29 May 2011 (fiscal 2011). As of 29 May 2011, the company operated through subsidiaries 1,894 restaurants in North America.
In the United States, the company operated 1,860 restaurants including 670 Red Lobster, 784 Olive Garden, 354 LongHorn Steakhouse, 44 The Capital Grille, 26 Bahama Breeze, 17 Seasons 52 and one test synergy restaurant which houses both a Red Lobster and Olive Garden restaurant in the same building. In Canada, it operated 34 restaurants, including 28 Red Lobster and six Olive Garden restaurants. From the consolidated balance sheet and income statement (annual report 2011), the following data were extracted.

A Note to the financial statements indicates that inventory consists principally of food and beverages. The company€™s fiscal year is a 52- or 53-week year ending on the
last Sunday in May each year.
Diedrich Coffee
Diedrich Coffee is a specialty coffee roaster, wholesaler and retailer. The company€™s brands include Diedrich Coffee, Gloria Jean€™s and Coffee People. The majority of its revenue is generated from wholesale customers located across the United States. In addition, the company operates a coffee roasting facility in central California that supplies freshly roasted coffee beans to its retail locations and to its wholesale customers. From the consolidated balance sheet and income statement (annual report 2010), the following data were extracted.

A Note to financial statements indicates that inventory consists principally of raw materials (green bean coffee), and finished goods, which include roasted coffee, tea, accessory products and packaged foods. The company€™s fiscal year ends on the Wednesday closest to 30 June.
Frisch€™s Restaurants
Frisch€™s Restaurants, Inc. operates full-service, familystyle restaurants under the name Frisch€™s Big Boy. The company also operates grill buffet style restaurants under the name Golden Corral pursuant to certain licensing agreements. As of 31 May 2011, the company€™s operations consisted of 95 family-style restaurants using the Big Boy trade name and 35 Golden Corral grill-buffet style family restaurants. Additionally, 25 Big Boy restaurants were in operation under licensing rights granted by the company to other operators. The restaurants licensed to other operators are located in various markets of Ohio, Kentucky and Indiana. From the consolidated balance sheet and income statement (annual report 2011), the following data were extracted.

A Note to the financial statements indicates that inventory consists principally of food items. The closing date is the Tuesday nearest to the last day of May. The first quarter of each fiscal year contains 16 weeks, while the last three-quarters each normally contain 12 weeks. Every fifth or sixth year, an additional week is added to the fourth quarter, which results in a 53 week fiscal year.
Morton€™s restaurant group
Morton€™s Restaurant Group, Inc. (MRG) is engaged in the business of owning and operating restaurants under the names Morton€™s The Steakhouse (Morton€™s), Trevi (Trevi) and Bertolini€™s Authentic Trattorias (Bertolini€™s). As of 2 January 2011, the company owned and operated 78 restaurants (77 Morton€™s and one Trevi restaurant). Morton€™s are upscale steakhouse restaurants. Morton€™s and the company€™s Italian restaurant appeal to a broad spectrum of consumer tastes and target separate price points and dining experiences. From the consolidated balance sheet and income statement (annual report 2011), the following data were extracted.

A Note to the financial statements indicates that inventory consists principally of food, beverages and supplies. The company uses a 52/53 week fiscal year which ends on the Sunday closest to 1 January. Approximately every sixth or seventh year, a 53rd week will be added.
Required
1 Compute the inventory turnover for each company.
2 Compute the average days inventory available for each company.
3 Compare and contrast the figures obtained.

Transcribed Image Text:

In millions of US dollars December December 31, 2009 31, 2010 Inventory, at cost, not in 109.9 106.2 excess of market (balance sheet) Company-operated 5,300.1 5,178.0 restaurant expenses Food & paper (income statement) In thousands of US dollars March 27, March 28, 2011 2010 Inventories (balance sheet) Cost of food and beverage 5,668 79,810 6,902 74,759 sales (income statement In millions of US dollars May 29, 2011 May 30, 2010 220.8 2,051.2 Inventories (balance 300.1 sheet) Food and beverage 2,173.6 costs (income statement) US Dollars in September 25,September 26, thousands Inventories 2009 (As restated) 132,182 2010 262,478 (balance sheet Cost of sales 931,017 540,744 income statement) May 31, 2011 5,717,264 5,958,540 US dollars June 1, 2010 Inventories (balance sheet) Cost of sales-food and 105,483,656 99,651,072 paper income statement) In thousands of US dollars Fiscal year Fiscal year 2010 2009 Inventories (balanoe sheet) Food and beverage costs income staterrent) 6,407 89,961 5,958 85,942