Acct212 Financial Accounting: Project 2 Financial Statement Analysis - YUM! Brands, Inc.

ACCT212 Financial Accounting
Project 2: Financial Statement Analysis-YUM! Brands, Inc.

Using the financial statements for YUM! Brands, Inc. located in Appendix A of your Textbook, you will calculate Vertical and Horizontal Analysis and the Financial Ratios listed below for the year ended in 2006.

The financial statement analysis project will count for 7.5% of your overall course grade. The Worksheets contained in this Workbook will aid in completing the requirements for submission.

1. Complete the Excel Spreadsheet in this Workbook labeled Horizontal & Vertical. Calculate the Horizontal & Vertical Analysis of YUM Brands, Inc.
2. Complete the Excel Spreadsheet in this Workbook labeled Ratios. Calculate the 2006 Ratios and show your computations and the formulas for YUM! Brands, Inc. Financial Statements in Appendix A.
Financial Ratio Calculations*
A. Liquidity Ratio
1. Current ratio
2. Acid-test ratio
3. Inventory turnover
4. Accounts Receivable turnover
5. Average Collection Period (Days’ sales in receivables)
B. Solvency Ratios
1. Debt ratio
2. Times-interest-earned ratio
C. Profitability Ratios
1. Gross Profit Percentage
2. Rate of return on net sales (Profit Margin rate)
3. Rate of return on total assets
4. Rate of return on common stockholders’ equity
5. Earnings per share of common stock
6. Price/earnings ratio
7. Dividend Yield
8. Book value per share of common stock

*Note: If you are unable to locate an item needed for a ratio, make an assumption and make sure you note your assumption in your work.
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