Week 4 Acc 300

INDIVIDUAL ASSIGNMENT: WEEK FOUR

1. Financial Statements Analysis

Using the financial statements of Landry’s Restaurants located in Appendix A of the text, Fundamentals of Financial Accounting 1st ed., by Phillips, Libby, and Libby, compute the following ratios for 2002 and 2003:

a. Earnings per share

b. Return on assets

c. Current ratio

d. Times interest earned

e. Asset turnover

f. Debt to total assets

g. Current cash debt coverage

h. Cash debt coverage

i. Free cash flow

Based on your analysis, what does this tell you of Landry’s financial performance (consider the changes between years)?

Landry's restaurants

2003 2002

Shares outstanding 27,653,852 27,771,479

Retained earnings $166,526,894.00 $125,459,679.00

Earnings per share $6.02 $4.52

Total assets $1,102,785,506 $933,015,079

Net Income $45,901,054 $41,521,616

Return on assets 4.16% 4.45%

Current assets $120,604,181 $92,669,115

Current liabilities $159,581,009 $148,354,402

Current ratio 0.756 0.625

Earnings before interest, taxes, depreciation & amortization $68,416,764 $64,286,619

Interest $9,561,482 $4,997,022

Times interest earned 7.155 12.865

Revenue $1,105,755,057 $894,794,621

Asset turnover 1.003 0.959

Debt 299,735,906 189,354,402

Debt to total assets 0.27 0.20

Current cash debt coverage 0.4287 0.4333

Total liabilities $498,234,757 $365,939,642

Cash debt coverage 0.137 0.176

Depreciation/amortization $48,824,493.00 $40,480,020.00

Change in working capital -$2,618,567.00 -$20,241,612.00

Capital expenditures $162,894,783.00 $115,903,544.00

Free cash flow -$65,550,669.00 -$13,660,296.00

Based on the analysis, the company increased the earnings per share, which is a good sign for the shareholders, and future investors. On the other end, the company’s return on assets was lower. This sign might be an indication that the company’s assets are not being used as successfully as in the prior year. Landry’s current ratio is...