Prepare a vertical analysis of the sales

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Problem - Yum! Brands, Inc. (YUM) is a worldwide operator and franchisor of fast-food restaurants, under the familiar brands of KFC, Pizza Hut, and Taco Bell. Segment revenues, operating income, and depreciation and amortization expense for Yum!'s operating segments are provided for a recent year as follows (in millions):

Segment

Sales

Operating Income

Depreciation and Amortization Expense

KFC

$3,232

$874

$173

Pizza Hut

1,111

370

36

Taco Bell

2,025

593

91

Required -

a. Prepare a vertical analysis of the sales as a percent of total sales for the three segments. Round percentages to the nearest whole percent. Which segment has the greatest percentage of total sales?

b. Determine the earnings before interest, taxes, depreciation, and amortization (EBITDA) for the three segments.

c. Determine the EBITDA as a percent of sales (EBITDA margin) for the three segments. Round percentages to the nearest whole percent.

d. Interpret the analysis in (c).

Reference no: EM132716632

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