EAT Accounting Analysis

Brinker’s Financial Statements

Brinker Annual Report

Risk Analysis:

  • Receivable Turnover: At 61.02 times, it is comparatively FAIR to that of industry average. While it may not be high enough, it is definitely higher compared to that of BJ’s, Buffalo Wild Wings’ and Ruth’s.
  • Inventory Turnover: At 26.94 times, It is comparatively POOR to that of industry average. Among the five companies, Brinker International has the lowest Inventory Turnover ratio.
  • Current Ratio: At 1.11 to 1, It is comparatively FAIR or close to that of industry average. Compared to the other four companies, it is second to Ruth’s in terms of lowest current ratio in terms of having the capability to pay off short-term debts.
  • Acid Test Ratio: At 0.36 to 1, It is comparatively POOR to that of industry average. The acid test ratio for our company is the lowest in comparison to the remaining four. May not have the capability to meet all current debt obligations.
  • Debt to Equity: At 154.15%, It is comparatively POOR to that of industry average. Brinker International has the highest percentage of debt to equity ratio among the 5 companies therefore it is the one that is at most risk when it comes to paying off long term debt.

Profit Analysis:

  • Gross Profit: At 70.64%, It is comparatively GOOD to that of industry average. It is second to Chipotle’s in terms of highest gross profit percentage.
  • Return on Assets: At 7.42%, It is comparatively POOR to that of industry average. It is the third lowest percentage when it comes to return and asset investment, next to BJ’s and Ruth’s.
  • Profit Margin: At 4.93, It is comparatively POOR to that of average industry. Once again it is the third lowest percentage next to BJ’s and Ruth’s when it comes to small income per dollar sold.
  • Asset Turnover: At 1.50, It is comparatively POOR to that of industry average. It shows low sales volumes in relation to investment in assets. Low as it is, it is not the lowest compared to that of BJ’s and Ruth’s.
  • Return on Equity: At 20.15%, it is comparatively GOOD to that of industry average. Second to Chipotle in terms of high percentage, it shows a good income earned for each dollar invested in stockholder’s equity.
  • Price-earnings: At 49.71, it is comparatively GOOD to that of industry average. Among the five companies, it has the highest ratio which is an indicator of high expectations by investors for increased earnings growth.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s