Financial Statement Analysis Research Paper Example | Topics and Well Written Essays - 1500 words

Financial Statement Analysis - Research Paper Example It provides awareness to the investors in that guide them in making important investment decisions. The analysis of the firm will reveal its financial background, operating efficiency, liquidity position, and profitability, going concern, and capital structure and gearing position. Industry analysis facilitates the understanding of the operating environment, identification of external threats and opportunities for investment, analysis of trends within the industry and the general performance of the industry. The Yum! Brands Inc. is a fast food restaurant incorporated in 1927. The company establishes, operates, franchises and licenses a global system of restaurants, which make, pack and sell a menu of priced food commodities. The company has three powerful brands, TACO Bell, KFC and Pizza Hut, which has continuously sustained its profitability over the years. Over the years, the company has reported increase in turnover, profits and returns to shareholders. The earnings per share of the company has an upwards trend for the past eight years with the exception of 2013 when the earnings dropped significantly (Morningstar Inc., 2014). The company’s growth is driven by its powerful brands, superior marketing strategies, breakthrough innovations and competing values, and venturing into new markets (Yum! Brands Inc., 2014). The restaurant business in the U.S is highly competitive with major multinational companies such as Yum! Brands, Starbucks, McDonald’s, Wendy’s, and Chipotle. Personal income, demographics and consumer tastes and preferences drive demand in this industry. Individual entities in the industry have varied profitability levels. Whereas the quick-service restaurants rely on high-volume turnover and efficient operations, the full-service restaurants rely on effective marketing and high-margin items. This industry is experiencing an upward growth trend in sales, profitability and shareholders returns over the years