Chuck E Cheeses

roll E. stops Where A tiddler Can Be A Kid Yvonne Bell-White The Catholic University of America This paper was prepargond for pecuniary Decision Making, MBU 652, Summer 2011, taught by Professor Howard S. Steed, PhD Abstract In this psycho abstract paper I choose to learn about Chuck E. give ups. I demonstrate my understanding of the categories of pecuniary Statement Analysis, which includes profitability, fluidity, activity and debt (leverage). Our class was delegate a community for pecuniary scrutiny and to nurse financial debates (Balance Sheet, Income Statement, and silver Flow Statement), from the telephoners nigh new Annual Report.We atomic number 18 to prepare a compose outline of the composition with the following requirements 1) describing the intersection point or service marketed by the phoner 2) respect the beau monde in terms of the financial ratios we believe are most helpful in understanding the smart sets performance and 3) include a financial forecast for the said partnership for the next 2-3 years. We were asked to include an gauge of the companys prospects for the company industry for the years ahead. Finally, the students were asked to give an viva voce creation to the class using this information. I choose to do my analysis of a company called Chuck E.high mallows. This paper will explain what Ive learned about the financial statement analysis categories. Chuck E. give ups Where A Kid Can Be A Kid This class was assigned a company for financial scrutiny and to obtain financial statements (Balance Sheet, Income Statement, and Cash Flow Statement), from the companys most recent Annual Report. We are to prepare a written analysis of the organization with the following requirements 1) describing the product or service marketed by the company 2) evaluate the company in terms of the financial ratios we believe are most helpful in nderstanding the companys performance and 3) include a financial forecast for the said company for the next 2-3 years. We were asked to include an estimate of the companys prospects for the company industry for the years ahead. Finally, the students were asked to give an oral presentation to the class using this information. I choose to do my analysis of a company called Chuck E. Cheeses. In 1977, Nolan Bushnell, also know as the father of the video arcade industry, for his formation of Atari, Inc. , founded Chuck E.Cheese Pizza-Time Theaters. Its a nationally recognized leader in family dine and entertainment. Chuck E Cheeses is located in 48 states and seven foreign countries or territories. Each store feature musical theater and comic entertainment by robotic and animated characters, arcade-style and skill-oriented games, rides and many other activities to aggregation to families and children between the ages of two to twelve. Chuck E. Cheese stores offers a variety dinning cream consisting of pizza, sandwiches, salad bar and desserts.There business development s trategy is foc utilize on maintaining and evolving their existing stores, by developing tall sales volume company- avouched stores in primarily densely populated areas and selling franchises in domestic and internationalistic markets. Chuck E Cheeses are typically opened in obtain centers or free standing buildings tightlipped shopping centers As of January 2, 2011, they engage approximate 17,300 employees 17,000 field based and 300 located at the headquarters. in the first place casting into a company you should follow experts advice.Experts avow on the importance of research and doing your homework before you decide to invest in a company. In other words, dig deep into the companys financial statement and examine everything from the auditors tarradiddle to the companys references. Begin your homework by doing a Financial Statement Analysis. The financial statement analysis is how you will identify the companys financial strengths and weaknesses from understanding the ite ms of the balance sheet. The categories of the financial statement analysis are favorableness, liquid state, Activity and Debt (Leverage).Profitability can be expressed as a group of financial metrics used to measure a companys ability to make a profit as compared to its expenses, including costs acquired during a set forthicular period of time. In doing my homework on my company, Chuck E. Cheeses, I began with Profitability from the categories on the financial statement analysis, and continued to move through the other categories Liquidity, Activity and Debt (Leverage). PROFITABILITY Profitability return on assets (ROA) return on equity (ROE), expense/ kale confine (P/E circumscribe), dividend give out and dividend support-out ration. settle On Assets (ROA) determines the effectiveness with which a company distributes and manages its resources. ROA is expressed as net income divided by the mediocre tote up assets. The return on assets for Chuck E. Cheeses is 7%. The amou nt of net income returned as a percentage of shareholders equity. Return On Equity (ROE) determines a company profitability by fancying how lots profit a company makes with the money shareholders take hold invested. Therefore the Return on Equity (ROE) is expressed as a percentage and calculated as the net income/average owners equity. The return on equity for Chuck E Cheeses is 33%Assessing the ration of a companys period share price compared to its per-share earnings is called the Price/ compensation proportionality (P/E Ratio) and is calculated as the market price of common behave divided by the earnings per share and he P/E Ratio for Chuck E. Cheeses is . 15%. The Dividend admit is a way to compare the attractiveness various dividend acquiting stocks. The dividend yield advises an investor the yield he/she can look forward to if he/she purchases stock from the company. To calculate the dividend yield, divide the yearbook dividend per share by the market price per share .Chuck E Cheeses did not have the figures written in its annual report to perform calculations. The Dividend Pay-Out Ratio tell how hygienic a companys earnings supports the dividend makements. It is calculated by dividing the annual dividend per share by the earnings per share. Chuck E Cheese did not have the figures written in its annual report to perform calculations liquidness One determinant of a companys debt capacity is the liquidity of its assets. An asset is liquid if it can be readily converted to cash, darn a liability is liquid if it must be repaid in the near future.Liquidity is the companys works capital, underway ration and acid-test ration. The components of Liquidity are on the job(p) Capital, Current Ratio and Acid Test Ratio. The Working Capital measures both the companys effectiveness and its present(prenominal) financial health. The working capital ration is calculated by subtracting the authoritative assets from the current liabilities. The Working Capit al for my company is $-17,210. A positive working capital means that the company will be able to pay its short liabilities. A negative working capital means a company can not pay its short-term liabilities.The Current confine is used to provide an idea of the companys ability to pay back its short-term liabilities. To calculate the current ration you would divide the current assets by the current liabilities. Chuck E. Cheeses current ration is . 98. A high ration indicates a copy can pay its obligations. But on the other hand, if the current ration is under 1, the company would not be able to pay its obligations. The Acid-Test Ratio serves as a sign that help determine whether a company has enough short-term assets to cover the companys immediate liabilities with out selling its inventory.The acid-test ration is calculated by cash, plus accounts due divided by current liabilities. The acid-test ratio for Chuck E. Cheeses is 58%. If the ratio is slight than 1 a company cannot pay their current liabilities and should be looked at with extreme caution. ACTIVITY MEASURES The Activity Measure measures the volume of activity and is used as a basis for allocating costs. To activity measure includes Accounts Receivable derangement and armoury overturn. The Accounts Receivable Turnover (A/R) ratio is the number of times that accounts receivable amounts are collected within the year.If the A/R Turnover is high the company has a tight credit policy. If the A/R Turnover is low it says the company has a collection problem. To calculate the A/R Turnover divide the sales by the average A/R. The A/R Turnover for Chuck E Cheese is 27. 57 The Inventory Turnover the Cost of Goods Sold (COGS) divided by the Average Inventory. This show how many times a companys inventory is sell and replaced of a period of time. The Inventory Turnover for my company Chuck E. Cheeses is 53. 44 (number of days for turnover) DEBT (Leverage) The Debt (Leverage) includes the categories of Debt Ratio and Debt/Equity Ratio.The Debt Ratio explains what part of a companys debt has relative to its assets. It gives an idea of leverage and the potential difference risks the company could face. To calculate the Debt Ratio divide the occur liabilities by the total liabilities plus owners equity. The Debt Ratio for Chuck E. Cheeses is 79. The Debt/Equity Ratio can be calculated by dividing the total liabilities by the total owners equity. The Debt/Equity Ratio for Chuck E. Cheeses is . 39. The Debt/Equity Ratio measures a companys financial leverage and says what proportion of equity and debt the company is using to finance its assets.Chuck E. Cheeses have an opportunity to further expand globally. They have formalized a strategic plan for international growth and are actively seeking franchise partners in key Latin American countries including Argentina, Brazil, Columbia, Costa Rica, Mexico and Panama. As with any company, doing your research and homework before drop is very i mportant. I enjoyed learning about Chuck E Cheese finance and look forward to maybe one day owning my own franchise. After my research I have new idea for enlargement and one day hope to invest.