EXECUTIVE SUMMARY



EXECUTIVE SUMMARY Yum! Brands, Inc is a service restaurant company. It operates franchises and licenses Taco Bell, KFC, Pizza Hut, Long John Silver's and A&W Restaurants with worldwide system of restaurants which prepare, package and sell a menu of food items. The company’s financials and strategies are compared with Mc Donald’s Corporation and Domino’s Pizza, Inc. These comparisons indicated that Yum is a financially healthy and has strategies superior to its competitors as well. Analysis of Yum! Brands, Inc‘s external and internal environments reveal the company’s strengths, areas that may need improvements, outside threats and opportunities for growth.Yum! Brands, Inc operates internationally, however, in this research I focus mainly on US market and realized that the Company should focus on adding new lines products which are healthy line and organic line in order to capture consumers’ trends. They should also have a reward program to enhance customers’ loyalties with their brands.FINANCIAL ANALYSISEven though YUM! Brands, Inc. has been experiencing ups and downs after the financial crash of 2008, Yum! Brands, Inc. still manage to keep its financial healthy. As the result of analyzing Yum’s financial over the past five years, YUM! Brands, Inc., in fact did not experience any major decline on revenue. Yum manages to be on a healthy incline in revenue despite a drop in 2010. Through thorough analysis of YUM! Brands, Inc.’s income statement (Exhibit: Table 1a), Yum has been on a steady increase in revenue in the past 3 years. Yum as of year-end 2012 raised approximately 8% in revenue. However, that did not match the previous year (2011) where revenue rose by 11.31%. With the increase in revenue also comes increase in expenses. Yum’s income statement shows that there has been a 4.88% increase from the previous year. However, the biggest increase came from the previous year (2011) of 12.92%. Though there are increase in expenses, the amount increase was less than half from the prior year, showing that YUM! Brands, Inc. manages to stay competitive with competitors while making sure there they are still with budget. YUM! Brands, Inc.’s balance sheet (Exhibit: Table 1b) shows that Yum is financially in good health. Although their cash is reduced by 35% in 2012, Yum still has roughly $776 million on hand which is more than triple since the financial crash of 2008. Total liability has decrease by -3.17% in 2012 compared to the previous years. Total shareholders’ equity has also increase throughout the 5 year period. Shareholders’ equity rose by 17.59% in 2012 compared to 2011. With decrease in liability and increase in shareholders’ equity, YUM! Brands, Inc. proves that it can still stay competitive and maintain investor’s trust in the brands.When compared to a couple to YUM! Brands, Inc.’s competitors such as McDonald’s Corporation and Domino Pizza, Inc., YUM! Brands, Inc. still performs relative well financially. When comparing the three companies financially through both the income statement and the balance sheet (Exhibit: Table 2a and 2b), YUM! Brands, Inc. outperformed Dominos Pizza, Inc. by almost double in percentage of Total Revenue, 11.71 to 6.70 respectively, while trailing McDonald’s Corporation, 19.82 to 11.71 respectively. The trend between the three companies stayed constant throughout the last five years. Also, from the comparison, YUM! Brands, Inc. manages to keep indirect cost lower than its competitor while staying competitive with operating income throughout the last 5 years. That proves that YUM! Brands, Inc. is still popular with the consumer market. When speaking of financial health, YUM! Brands, Inc. financial ratios suggest that it’s relatively health. However, when compared to its competitor (Exhibit: Table 3) through profitability, asset management, debt management and liquidity ratios, YUM! Brands, Inc. is placed in the middle of the two competitors. YUM! Brands, Inc. leads the pack with regards to ROE with 80.53% followed by McDonald’s Corporation with 36.72%. Dominos Pizza, Inc. did not have ROE. YUM! Brands, Inc. debt-to- equity ratio is higher than its competitor. This signifies that Yum has more debt than equity when compared to competitors.Overall, YUM! Brands, Inc. is very healthy financially. Even through the financial crisis of 2008, YUM! Brands, Inc. still manage to increase revenue and stay competitive with other competitor. However, there are aspects of Yum that could use improvement but also to that regard; there are also aspects of Yum that outperform others. EXTERNAL ANALYSISGeneral EnvironmentThe general environment consists of six factors external to an industry which are demographic, social cultural, political/ legal, technological, economic and global. All of those factors are considered as the company’s opportunities and threats, but, the company rarely controls them.First of all, the demographic segment plays an important impact to the Yum Brands, Inc. Growing influence on the industry is the rapid growth of Hispanic and Asian populations in the U.S., which will continue to drive demand for more diverse in foods, including spicier flavors. Additionally, the large Boomers demographics will influence restaurant foods. Based on , there is an article about “Restaurant industry's 2012 trends shaped by demographics, nutrition”, they said that “the younger age group will provide a boost to juice/specialty drinks, and more brands will continue to shift their marketing dollars toward this demographic.” (Kelso). Another force that is shaping this industry is customer tastes and social habits. Consumers are aware of healthy food products and organic foods, now than any time before. Many foods in the fast food restaurant industry are considered unhealthy by many customers. That is why now they tend to get away from creasy, fat and lacking essential of vitamins food to organic, low fat and calories meals. In order to respond to this situation, the restaurants industry is changing their menus to add healthier options which lead customers to feel satisfied and enjoyably. The innovations of technological segment are enhancing the growth of fast food industry. The integration of technology into restaurants themselves will further raise customer expectations for convenience and speed while reinventing how guests select, pay for and receive their food. About economic segment, as the economic is getting worse so people become more concerned about value for money that they spend on meals. They desire of the price of fast food is low but the portions are big. This is considered a threat for Yum Brands because they not only eliminate cost but also keep low prices in order to compete with other fast food restaurants. Many restaurants are competing globally to gain a competitive advantage by trying to increase market shares. Yum! Brand Inc. is the leader in this strategy. The company currently owns five restaurants such as KFC, Pizza Hut, Taco Bell, Long John Silver’s and A&W. Most of the revenue generated from KFC and Pizza Hut comes from global markets especially China. Also, Yum! Brands are acquiring the most famous hotpot chain in China called Little Sheep. As the economy has slowed down in recent years, many restaurant operators have been looking for opportunities to expand their brands in to other countries such as: China, India, and Brazil. On the legal or political segment, it has a significant. This qualitative factor will lead to an increase in costs so the investment will have to spend a lot of time trying to overcome this issue. There is another regulation which does not have a large impact to the growth of company however; the industry may be concerned. That is the requirement for labeling the nutrition facts for the foods served in the restaurants. This can significantly affect fast food restaurants since their foods tend to contain higher calories and fat. Industry EnvironmentFor the fast food industry, consumers have a very strong bargain because of lacking of switching cost. In addition, their choices are all depended on their taste of the food and the feeling what they crave for on that they. And this is what can be changed every day. Entering to this market does not require a large amount of capital, yet, they can make much profit. Thus there are always new rivalry join in. Substitution is such a serious threat of fast food industry because other forms of profitable foodservice such as ready meals or homemade food. Furthermore, fast food is always considered as unhealthy and fat-food which is not good for dietary. Bargaining power of customer became very strong, especially, in the economic today. Because of low switching cost and personal taste, they can change their choice every day easily. Furthermore, price is also a key factor because customers are always comparing the prices between other fast food restaurants. If they acknowledge that the food of Yum’s restaurant- KFC for example- more expensive than McDonald, Yum’s restaurant will lose customers.According to Fast Food in the United State article, there are only two supply companies in US which are Sysco and Us Foodservice, Inc. This fact strengthens the bargaining power of supplier which means they have more power over the company. However, for the labor intensive, the fast food business gains an advantage because in majority countries, paying minimum wage is legislation.The Restaurant industry in US has limited potential entrants. Since the major players have already shared the market and stabilize their reputation for long time ago, it is difficult for a new business to get established. Major players have also accumulated their advantages against new entrants by building new restaurants, franchising, and expanding globally. And that is what makes the new entrants find hard to enter this industry.There are many existing restaurants from small to large size nowadays, are now focusing on value meal within the range $1- $3. This reaction is shifting consumer’s trends and larger focus on competition amongst industry players. They are creating a price war among themselves since there is such a negligible switching cost, consumers find easily to change to other restaurants. Nevertheless, the brand power still forms the greatest competition in this industry. For example, McDonald spends millions of dollars on global advertising. Overall, the intensity of existing rivalry is very strong. In term of substitutions, it is getting high because there is increasing of many differentiated fast food companies; customers have more options for their choices. Another reason for high threat of substitution in the restaurant industry is technology development. There are many new ways to enjoy the food at home now such as frozen re-heatable prepared food those are offered by strong competitors against fast food. These substitute products are very convenient, cheap and provides quality meals which satisfied the consumers’ needs towards fast food.INTERNAL ANALYSISThe internal analysis will be a best description of Yum! Brands, Inc‘s strengths and weaknesses which brings to its competitive environment. Through the use of VRIO framework and Yum! Brands, Inc. SWOT Analysis article, I have found that brand value, diversity store concepts and the recipe of making food in the company is its competitive advantages. StrengthThrough the use of VRIO framework and Yum! Brands, Inc. SWOT Analysis article, I have found that brand value, diversity store concepts and the recipe of making food in the company is its competitive advantages.ResourcesValuableRareInimitablew/out substitutedBrandYYYYRecipeYYYYExperienceYNNYLocationYNNYPriceYNNYAdvertisementYNNNPortfolio of strong brands with high level of consumer acceptance (Yum! Brands, Inc. SWOT Analysis)Yum Brands is a leading global quick service restaurants company based on number of restaurants. The Company operates five branded restaurant concepts: KFC, Pizza Hut, Taco Bell, Long John Silver’s and A&W. Many of these branded restaurants command market leading position in their respective segments. For instance, according to the company, in 2012, KFC was the leader in the US chicken QSR segment among companies featuring chicken-on-the bone as their primary product offering, with a 38% market share in that segment, which is over twice as large as that of its closest national competitor ((Yum! Brands, Inc. SWOT Analysis). Yum Brands and its concepts own numerous registered trademarks and service marks. Many of these marks have significant value and are materially important to its business. Over the years, the company has made large investments in brand promotions. The company's brands are identified as one of the best recognized global brands. Yum Brands' leading market position provides it with significant bargaining power. Furthermore, the company's strong brand value facilitates customer recall and allows Yum Brands to penetrate new markets as well as consolidate its presence in the existing ones.Being as a top company that having an unique recipe The secret recipe that consists of secret herbs and spices have been very valuable for the company as it is what makes the Company’s fried chickens and other items, exclusive, and unique. Portions of the secret spice mix are made at different locations in the United States, and the only complete, handwritten copy of the recipe is kept in a vault in corporate headquarters, and only a handful people know this secret recipe and they have signed strict confidentiality contracts. Because, the recipe is a trade secret it has been rare with and very much inimitable. And because it is so valuable the organization has exploited the recipe but very slightly, by introducing new menu itemsWeaknessesDependent heavily on suppliersA weak supply chain can delay the arrival of products to?Yum Brands Inc’s customers. Unnecessary delays can hurt?Yum Brands Inc?over the long run, because customers will cancel orders. Yum is depended heavily on their food suppliers and has no power over them. Furthermore, in the article about “Restaurant industry's 2012 trends shaped by demographics, nutrition mention that “Higher beef and chicken prices in 2012 will affect restaurant offerings and menu prices” (Kelso). This affects deeply for the Company’s cost which may cause a rise on menus.Lack of knowledge about their customers’ trendSince many other companies have captured the customers’ desired of healthy foods, Yum! Brands still keeps their company out of the games. They have not added any healthy line into their menus while all of the companies introduce it such as Chipotle, McDonald. It also hurts?Yum Brands Inc’s reputation and causes customers to flee to competitors, who are more responsible for them.Value Chain of Yum Brands’ IncIn my value chain analysis, I broke down the total service provided by Yum in several set of value creating activities and found out in which stages they add value through exceeds the cost of the activities, thereby resulting in a profit margin for cooperate.The primary value chain activities are:Inbound logistics: Most raw materials are imported from China. Shipment is through cargo air transport. Once shipment is received, the inventory manger will make sure that all the materials are accounted for and stored at a distribution center, where the material remains until the restaurant orders it. Operations: Once the inventories have been received and stored at the distribution center. Stores around the nation are allowed to place orders for their stores. Since YUM! Brands, Inc. deals mainly with food preparation, almost all of the materials shipped to stores are raw. Once the stores receive the materials, then they will go through the process or prepping the materials to make fresh cooked foods and serve it to customers. Marketing & Sales: Yum’s main marketing strategy is advisement through mailings, television advertisement, social media and coupon promotions as well as special pricing on certain days out of the week. Yum! Brands, Inc keeps themselves very active in news and popular social media such as Face book, Twitters, Youtube and Instagrams. They are having thousands of followers who are posting and updating every day one those social websites. Nevertheless, Yum has a very strong Marketing team who is always keep their brands stand out among other competitors.Service: Yum employees must follows a proven success training process. As for food preparations, stores must follow policies from corporate on how to prepare a certain dish correct, from measures and materials used, to ensure that each dish served is to customer’s satisfaction. Inbound logistics and operations, these two stages are the key primary activities which give them the cost advantage with superior quality. By doing so, these stages ensureYum’s profitability.Support Activities:Procurement: Transcom Foods Limited has obtained the franchise rights of Yum. The franchise agreement provides for buying approved equipment, service ware and the cooking recipes from The Company approved suppliers, for example, in Bangladesh, BRAC Poultry is the key supplier for KFC chicken but flour is exported from a company named Mitsides. With centralized distribution of food purchasing and ware provider, this gives them a great strength as quality could be ensured. Cost control is achieved as Yum purchases their supplies in bulk directly.Technology & Systems Development: Yum often follows the new technology very well. They always keep themselves up to date with new tools that help them make business faster and more convenient for customers. For example, Pizza Hut- the brand owned by Yum! Brands- have created automatic ordering systems that customers can order pizza, pay and come to pick it up when it is ready. Besides ordering online, technology also helps consumers locate their favorite fast food restaurants in their nearest area and show them how to get there. From the restaurateurs' perspective, digital menu boards, flat screens and in-store signage will be critical marketing tools. It opens a new era for take-out foods. Even though they don’t use much technology in cooking process but applying a lot of currently technology is one of their strength. There is no product technology or research and developments occurs which can make a real difference in the products they offers. But it has a secret recipe, which separates its fried chicken and other foods from other fast food providers and attracts more customers. This actually helps it to gain more profit. Human Resource Management: Yum’s human resource management goes through their usual job of recruitment, selection, training and development. Usually a franchise of Yum such as the one in China consists of Area Managers, Restaurant General Managers, Assistant Managers, Trainee Managers, and Customer Service Team Members and Food Service Team Members. The HRM department is one of the service activities that Yum cannot do without as they have direct interactions with the customers and due to this the HRM department has to recruit strong and competent employees, so that the customers can get the best out of Yum.Firm Infrastructure: In order to assist the restaurant planning and management practices, the company starts with a strategic analysis of the opportunity by market development strategic plan. The Company maps demographics to determine where to develop and identify restaurant locations and provides asset management to determine the optimum mix and number of locations. Construction and project management by YUM! Brand helps Transcom Foods Limited to design and build individual restaurants. With market development system the company would try to locate in convenient location. Because it understands the dynamics of its industry as well as very much aware of the booming market.The procurement and firm infrastructure help the primary activities by provide certain facilities which lead its quality to above average and help it to attain sustainable growth with the profit petitor AnalysisThrough comparison of Yum and its two closest competitors, McDonald’s Corporation and Dominos Pizza Inc., Yum is inferior to both of its competitors in term of spending for advertisement. Yum Brands spend approximately $700 million, allocated to three of its most profitable brand, Taco Bell, Pizza Hut and KFC. While its competitor, McDonald’s Dominos Pizza Inc., spend roughly $1.36 billion dollars and $1.4 in advertisement respectively. All three companies use similar techniques, which are utilizing technologies such as smart phones as well as televise sporting events such as the super bowl and the NBA Finals to promote their respective products. However, besides for technology, McDonald still believes in good old fashion promotion and advertising by billboards. McDonalds leads the pack with roughly $71 million spent on billboards alone. While Yum is concentrating on expanding its brand internationally, domestically, Yum is dealing competition from the newly redesign Domino. Domino recently changes their marketing technique/method to regain market share and dethrone Pizza Hut, a subsidiary of Yum Brands. As such to stay competitive with the new marketing campaign from Dominos, Yum Brands did not change its advertising techniques, however they changes its pricing techniques as well as creating new menu items that is attractive to consumers. STRATEGY COMPARISONNameStrategy highlightsRationales for strategyProsConsYum!Brands,IncProducts:Fried chickenTacospizza1.Drive aggressive, International expansion and build strong brands everywhere2. Dramatically improve U.S. brand positions, consistency and return1. open thousands of new restaurants in many countries in the world within 20122. ?They added 150 net new units at Pizza Hut and over 30 net new units at Taco Bell.1.Different store concepts catering to diverseCustomer base.2. Portfolio of strong brands with high level of consumer acceptance 1. Loss due to refranchising of equity markets outside the US 2.Allegations against YUM’s poultrysupply management and food itemsaffecting salesMcDonald's CorporationProducts:hamburgerscheeseburgers1.Focus on customers’ nutrition and well-being2. environmental responsibility1. Continuously improve classic offerings and increase the number and variety of new options that deliver the great taste and balance our customers seek.2. reduce the environmental impacts of packaging and waste in restaurant operations1.Largest fast food market share in the world2. $2 billion advertising budget1.no differentiations among other competitors2. already had a negative publicity that will affect brand reputation and customers’ trustDomino's Pizza, Inc.Product:pizza1.strive to keep their position as #1 pizza delivery in US 2. putting people first1.Is the largest share of pizza delivery channel and continued innovation2. operate through a set of guiding principles founded on integrity and putting people first( our shareholders, customers, suppliers and employees)1. Leader in online & mobile ordering.2. Strong Teamwork ?aspire to achieve our collective vision1.Weak international presence as comparedto peers 2. Need to provide more training for employees.RECOMMENDATIONPotential StrategiesOverall, Yum! Brands have done a very good job in analyze their strategies. However, there are four recommendations only for Yum! Brands, Inc to do in order to eliminate their weaknesses and to enhance their strengths as well as obtain their potential opportunities to compete with other competitors.First of all, they should build their own food supply company that can grow all raw materials such as chicken, beef, veggies, potato and so on. By owning food Supply Company, they can reduce threat from suppliers and have an ability to control food. Secondary, based on the changing of eating habit’s trend, people tend to eat healthier and prefer more organic foods in their meals. Yum can think of adding two more lines in their menu which are the organic line such as organic chickens, organic potatoes and another healthy line such as wheat buns for burgers, multiple grain crust for pizza and spinach tortillas for taco. With the contribution of these two lines, Yum will catch majority attentions from consumers who are caring about what they are eating every day and drive their thought about fast food restaurants to a different way which is healthier and tastier. Additionally, Yum should establish customer’s loyalty by using reward cards, thus, they can reduce bargain of customers’ power. For example, the reward card allows customers to earn points every time they purchased food. And at some certain point they can get a free food. Last but not least, to keep their employees to be retrained regularly is such very important factors that help Yum provide a better customer services. Even though, most of consumers choose fast food restaurant because they do not to tip servers, they still expect good and appropriate services. Best recommendation for Yum! Brands and why?Among those recommendations, there are two options that I believe that it will work well for Yum and their reasons.The option that adds a healthy line and organic line seem very practical for the Company. It is because they already have a great Research and Development team, they are capable to produce a special and unique recipe for these two lines. Nevertheless, the strong brand awareness with in many years ago will allow them to attract consumers trying their new products. Reward program is such an effective and popular program that is using by many companies such as Starbuck, Yumilicious. With Starbuck, they have a Starbuck card with twelve purchases get one free drink or Yumilicious Yogurt has a program that you will have a free ten oz of yogurt after reaching total of $30 bills contributed from many visits. This program is working pretty well in most of the companies and it will work more perfectly in the economic crisis. Thus, if Yum! Brands, Inc can tie their customers’ loyalty with their brands; they can not only control consumers’ switching cost but also compete with all of strong, existing rivalries.The Challenges Challenges always happen every time for any company who wants to find a new way in their business. Of course, Yum cannot avoid them. For adding new products line in their menus, they will face with the strong exist competitors such as Subway or Wendy because they already carried those lines in their menus. On the other hands, having loyal customers’ programs will cost a lot of money that may affect their finances to do other projects.How to get over challenges?As a company with healthy financial resources and great teams, they will get over those obstacles easily. Yum, Brands’ Inc are having an valuable recognition by owning many unique recipes, with an experienced and talented Research and Development Team, they will come up with another recipe that will keep their brands compete among other strong rivalries in the fast food restaurants’ industry. After that, Yum also has to spend a lot of money on advertising, promotions and using their current social media websites to bring their new products closed to customers’ awareness. By doing so, they can compete easily with all the competitors.Reward system is very costly, yet, Yum should consider of making a mobile application for reward programs on smart phone. Most of people nowadays own smart phones so they can download an application and use it to keep track their award. Additionally, having a mobile application is always cheaper than giving out reward cards. Not only convenient factors, but also mobile application is a trend of new technology. The most important about reward cards is Yum Brands should apply that for all of their existing brands such as KFC, Pizza Hut, Taco Bell, A&W and Little Sheep. The consistency will give them an incredible result for all of those brands that the Company is carrying on.Exhibits:Table 1a: YUM! Brands, Inc.: Change in Financials – Income StatementIncome Statement(US Dollars, In Millions)2012% Change2011% Change2010% Change2009% Change2008Net Sales / Revenue13,6337.98%12,62611.31%11,3434.68%10,836-3.93%11,279Total Expense, net11,3394.88%10,81112.92%9,5743.54%9,246-5.39%9,773Operating Income2,29426.39%1,8152.60%1,76911.26%1,5905.58%1,506Interest Income (expense), net(149)-4.49%(156)-10.86%(175)-9.79%(194)-14.15%(226)Income Before Tax2,14529.29%1,6594.08%1,59414.18%1,3969.06%1,280Income Tax Provision53765.74%324-22.12%41632.91%313-0.01%316Net Income – Including Non-controlling Interest1,60820.45%1,33513.33%1,1788.77%1,08312.34964Net Income – Non-controlling Interest(11)-31.25%(16)-20%(20)66.67%(12)--Net Income – YUM! Brands, Inc.1,59721.08%1,31913.90%1,1588.12%1,071--Table 1b: YUM! Brands, Inc.: Change in Financials – Balance SheetBalance Sheet(US Dollars, In Millions)2012% Change2011% Change2010% Change2009% Change2008Cash & cash equivalents776-35.22%1,198-15.99%1,426100%35363.43%216Property, Plant & Equipment, net4,2505.15%4,0425.54%3,830-1.77%3,8995.09%3,710Total Assets9,0112.00%8,8346.23%8,31616.34%7,1489.51%6,527Total Liabilities6,699-3.17%6,9184.08%6,64710.16%6,034-9.06%6,635Total Shareholders’ equity – YUM! Brands, Inc. 2,15418.16%1,82315.67%1,57652.88%1,025100%(108)Non-controlling Interest996.45%930.00%934.49%89--Total Shareholder’s Equity2,25317.59%1,91614.80%1,66949.82%1,114--Source: Mergent, Inc, Mergent Online, UT Dallas University Librabry, 8 Dec. 2013.Table 2a: Common Size Income Statement of YUM! Brands, Inc. vs. McDonald’s Corporation and Domino Pizza, mon Size Income Statements12 months ended Dec.:20122011201020092008(% of Total Revenue)YUM! BrandTotal Revenue100100100100100Total Indirect Operating Costs12.3713.0412.6313.3112.79Operating Income15.3714.5715.7813.4712.16Interest Income-1.09-1.24-1.54-1.79-2.00Total Non-Operating Income1.12-0.57-0.560.870.93Earnings Before Tax15.3912.7713.6812.5511.08Taxation3.942.573.672.892.80Net Income11.7110.4510.219.888.55McDonald’s CorporationTotal Revenue100100100100100Total Indirect Operating Costs14.6314.4415.7315.5415.58Operating Income30.1430.6230.0328.8426.38Interest Income-1.87-1.83-1.87-2.08-2.22Total Non-Operating Income0.550.300.330.500.54Earnings Before Tax28.7929.0128.4027.7825.71Taxation9.489.298.538.517.84Net Income19.8220.3820.5520.0118.34Dominos Pizza, Inc.Total Revenue100100100100100Total Indirect Operating Costs13.0512.7913.4514.0611.80Operating Income16.8215.6914.5013.5013.69Interest Income-6.02-5.53-6.15-7.86-7.87Total Non-Operating Income-6.02-5.53-5.65-3.48-7.87Earnings Before Tax10.8010.168.859.655.815Taxation4.103.783.253.972.03Net Income6.706.385.605.683.79Source: Mergent, Inc, Mergent Online, UT Dallas University Librabry, 8 Dec. 2013.Table 2b: Common Size Balance Sheet of YUM! Brands, Inc. vs. McDonald’s Corporation and Domino Pizza, mon Size Balance Sheet12 months ended Dec.:20122011201020092008(% of Total Assets)YUM! BrandTotal Assets100100100100100Cash & Equivalents8.6113.5617.154.943.31Inventories3.473.092.271.712.19Total Current Assets21.1926.2727.8116.9014.57Current Debt0.113.628.090.830.38Total Liability75.4479.3681.0585.66101.66Retained Earnings25.3723.2320.6513.934.64Total Equity23.9020.6318.9514.34-1.67McDonald’s CorporationTotal Assets100100100100100Cash & Equivalents6.607.087.475.947.25Inventories0.340.350.340.350.39Total Current Assets13.9113.3513.6611.3012.36Current Debt-1.110.030.060.11Total Liability56.7856.3854.2353.5752.98Retained Earnings111.00111.27105.74103.46101.73Total Equity43.2243.6245.7746.4347.02Dominos Pizza, Inc.Total Assets100100100100100Cash & Equivalents11.4610.4710.409.349.78Inventories6.506.395.865.715.25Total Current Assets64.0568.0266.1961.4154.82Current Debt5.090.190.1811.100.07Total Liability47.9941.0340.3848.3632.25Retained Earnings-279.25-251.37-272.12-295.74-306.54Total Equity-279.28-251.74-262.71-291.12-307.17Source: Mergent, Inc, Mergent Online, UT Dallas University Librabry, 8 Dec. 2013.Table 3: Financial Ratios for YUM Brand vs. McDonald’s Corporation & Dominos Pizza, Inc.Financial Ratios20122011201020092008Liquidity RatiosYUM! BrandCurrent Ratio0.870.950.940.730.55Quick Ratio0.490.610.680.350.25Debt ManagementDebt-to-Equity Ratio1.371.641.853.13-Asset ManagementInventory Turnover33.6239.5752.2259.8862.47Total Asset Turnover1.531.451.471.591.64Profitability RatiosEBITDA Margin (%)21.118.7520.2119.4417.89Return on Assets (%)17.9515.1315.0215.7114.04Return on Equity (%) 80.5376.3689.29234.23187.52Revenue Per Employee26,13926,65630,09031,04533,661McDonald’s CorporationLiquidity RatiosCurrent Ratio1.451.251.491.141.39Quick Ratio1.091.041.220.951.18Debt ManagementDebt-to-Equity Ratio0.890.870.790.750.76Asset ManagementInventory Turnover127.66130.90120.87116.23115.31Total Asset Turnover0.800.830.770.780.81Profitability RatiosEBITDA Margin (%)35.7535.7635.2534.9732.87Return on Assets (%)15.9416.9415.9015.5114.87Return on Equity (%) 36.7237.9234.5133.2030.01Revenue Per Employee62,48164,30060,18759,07758,645Dominos Pizza, Inc.Liquidity RatiosCurrent Ratio1.331.661.641.271.70Quick Ratio0.620.660.660.510.72Debt ManagementDebt-to-Equity Ratio-----Asset ManagementInventory Turnover38.1240.9642.8240.5043.10Total Asset Turnover3.513.523.443.013.05Profitability RatiosEBITDA Margin (%)19.0717.5117.0219.9016.46Return on Assets (%)23.5122.4519.2817.1011.55Return on Equity (%) -----Revenue Per Employee168,305165,673144,515135,426136,098Source: Mergent, Inc, Mergent Online, UT Dallas University Librabry, 8 Dec. 2013.Citation"Fast Food Industry Profile: The United States."?Fast Food Industry Profile: United States?(2012): 1-32.?Business Source Complete. Web. 5 Dec. 2013National Restaurant Association, 2009 Restaurant Industry Forecast: ?Datamonitor, United States - Fast Food (Published August 2009)"Yum! Brands, Inc. SWOT Analysis."?Yum! Brands, Inc. SWOT Analysis?(2013): 1-9.?Business Source Complete. eb. 8 Dec. 2013.Kelso, Alicia . "Fast Casual."?Restaurant industry’s 2012 trends shaped by demographics, nutrition. N.p., 17 1 2012. Web. 9 Dec 2013. <, Eric. "Fast Food."?Adweek?49.14 (2008): SR13.?Business Source Complete. Web. 10 Dec. 2013.References ................
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