1 Analysis Structure 1-Executive Summary Burger King Holdings,inc. was been founded in 1953. Burger King is the world’s #2 hamburger chain after Mc Donalds. By the early 2000s Burger King is a little left behind. “years of under-investment left it struggling in its rival’s shadow by the early 2000s. ” although a lot of consumers agree that it meals taste better than McDonald ones but It doesn’t have the excellent perception created the administrative power and the aggressive marketing of his main by concurrent.
It was freed in 2002 from Diageo the number one in wine and spirit drinks, which owned it since 1997, after a merger with Guinness. Although owned by Texas Pacific Group for $2. 26 billion, it recovered its latitudes of the sixties. The #2 in hamburger fast food came back progressively in the fight with Mcdonalds. Since 2004 his performance constantly increased. In his intensive marketing campaign it targeted particularly core young male market. “ Advertising Age estimated global measured advertising expenditure of $356m in 2007, making Burger King the world’s #95 advertiser. 2. Company Background. It’s a global fast food restaurant specialized in Hamburger making. By 2009 they reported they had more 12000 restaurants in 74 countries and 90% are privately owned through franchises. 66% are in the United States. With 73,000 employees, they served daily more than 10 millions clients a day. ”In 2008, Fortune magazine ranked Burger King Corp. (BKC) among America’s 1,000 largest corporations and in 2010”(electronic source). 3-Operations and Products. Management Team John W. Chidsey: Chief Executive Officer and Executive Chairman John W.
Chidsey has served as our Chief Executive Officer and a member of our board since April 2006. Mr. Chidsey became Executive Chairman of our board on July 1, 2008. From September 2005 until April 2006, he was our President and Chief Financial Officer and from June 2004 until September 2005, he was our President of North America. Mr. Chidsey joined us as Executive Vice President, Chief Administrative and Financial Officer in March 2004 and held that position until June 2004. From January 1996 to March 2003, Mr.
Chidsey served in numerous positions at Cendant Corporation, most recently as Chief Executive Officer of the Vehicle Services Division and the Financial Services Division. members: Brian T. Swette , Richard W . Boyce , David A. Brandon ,Ronald M . Dykes , Peter R. Formanek , Manuel Garcia , Sanjeev K. Mehra ,Stephen Pagliuca , Kneeland C. Youngblood . Anne Chwat General Counsel and Corporate Secretary Gladys DeClouet Senior Vice President, North America Company Operations Charles M. Fallon President, North America Kevin Higgins President, EMEA Armando Jacomino President, Latin America Julio A. Ramirez
Executive Vice President, Global Operations Raj Rawal Senior Vice President and Chief Information Officer Peter Robinson Executive Vice President Peter C. Smith Chief Human Resources Officer Peter Tan President, Asia Pacific Amy E. Wagner Senior Vice President, Investor Relations and Global Communications Ben K. Wells Chief Financial Officer The key products are burgers and fries. McDonald, with more than thirty billions of dollar, as asset , is the biggest. Wendys is another concurrent. They are among the most popular food restaurants in U. S. A and in the world. COMMON SIZE ANALYSIS FOR BURGER KING And WENDYS
In spite of the economic crisis in 2008 We don’t observe a big variance between the common size in 2007, 2008 and 2009 for Burger King. Net profit around 7% has been realized. At the opposite Wendys’ performance was less good for 2009 with a net income common size of 0. 10%. In spite of a very low profit, its result have improved a lot. Since 2008 has been catastrophic with a net income in the red and a net loss of 479 million of dollars . The new strategy adopted by Burger since 2002 could explain the relative good performance for Burger King in the economic crisis period.
The result is all the more remarkable that the total revenue for Burger king is 2. 573 billions with 3. 58 billions for Wendys. This last result is relative since the total asset of Wendys is almost double the Burger King’s one for 2009: 4,975 billions for Wendys and 2. 707 for Burger king. FINANCIAL RATIOS Liquidity Measures: Liquidity Measures for Burger King don’t seem healthy with a current ratio of 0. 76, 0. 88, 0. 93 for 2009, 2008, 2007 and acid-test-ratio 0. 52, 0. 66 and 0. 68. “ As a general rule, a current ratio of 2. 0 and an acid-test ratio of 1. are considered indicative of adequate liquidity”. The liabilities are bigger than the equity for Burger, which gives a negative working capital. The liquidity availability is a lot better for Wendys with a current ratio of 1. 84 and acid-test-ratio of 1. 43 in 2009. The Working Capital,Current ratio,acid test ratio varies from double to quadruple in favor of WENDYS. Activity Measures: Activity measures are appreciable for both companies. Profitability Measures: The ratios confirm the trend of the common size. The ratios of Burger King show a relatively good result in a recession period.
The ratios put more in relief in the bad performance of Wendys even though it has a turnover of 0. 74 Debt or Financial Leverage: Although reasonable, the level of debt is higher for Burger King than Wendys. But as learned, debt permits to reduce tax expense and improves ROE. Reference: Marshall, D. H. , & McManus, W. W. & Viele, D. F. (2011). Accounting: What the Numbers Mean. NewYork, NY: McGraw-Hill Companies, Inc. . http://www. adbrands. net/us/burgerking_us. htm http://investor. bk. com/phoenix. zhtml? c=87140&p=irol-IRHome
