Liquidity of several restaurant companies

Reference no: EM131002015

Eat at my restaurant - liquidity review

With this case, we review the liquidity of several restaurant companies. The restaurant com- panies reviewed and the year-end dates are as follows:

1. Yum Brands, Inc. (December 30, 2006; December 30, 2005)

"Yum consists of six operating segments; KFC, Pizza Hut, Taco Bell, LJS/A&W, Yum Restaurants International . . . and YUM Restaurants China." 10-K

2. Panera Bread (December 26, 2006; December 27, 2005)

"As of December 26, 2006 we operated directly and through area development agree- ments with 41 franchise groups, bakery cafes under Panera Bread® and Saint Louis Bread® names." 10-K

3. Starbucks (October 1, 2006; October 2, 2005)

"Starbucks purchases and roasts high-quality whole bean coffees and sells them, along with fresh, rich-brewed coffees, Italian-style espresso beverages, cold blended beverages, a variety of complementary food items, coffee-related accessories and equipment, a selection of premium teas and a line of compact discs, primarily through Company-operated retail stores." 10-K

Yum Brands, Inc. Panera Bread Starbucks

Data Reviewed	2006	2005	2006	2005	2006	2005
Current ratio	0.52	0.53	1.16	1.18	0.79	0.99
Acid test	0.32	0.27	0.83	0.91	0.35	0.41

Required:

a. For each company, indicate the trend in liquidity.

b. Give your opinion as to the relative liquidity of each of these companies. How would you rank these companies?

Reference no: EM131002015

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