Essay on Burger King Summay Analysis

957 Words Aug 11th, 2010 4 Pages
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
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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 1.0 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

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