Cash Flow and Company

Wendy’s a place I eat when my mom had a long day or just doesn't want to cook. It takes little to no time at all to get your food. Wendy’s is an international fast food chain that started in Columbus Ohio in 1969. I grew up eating Wendy’s one of my cheap favorites. Wendy’s gets hungry customers from ads and billboards all over.

Quick ratio is another measure of liquidity. In quick ratio we consider only liquid assets and its standard ratio is 1:1. Quick ratio of Peyton Approved is 7.63. Thus, there is no doubt that the company has got excellent liquidity. Company has enough liquid assets to pay off current liabilities.

This ratio is similar to current ratio, except that it excludes inventory from current assets. Inventory is subtracted because it is considered to be less liquid than other current assets, that is, it cannot be easily used to pay for the company’s current liabilities. A company having a quick ratio of at least 1.0, is considered to be financially stable. It has sufficient liquid assets and hence, it will be able to pay back its debts easily (Qasim Saleem et al., 2011).

Wendy's has changed and expanded a lot since Dave Thomas opened the first restaurant ever in 1969 in Columbus,Ohio which he named in honor of his daughter . In 1975 they opened up the first ever Wendy's that was located Canada and by 1976 they had opened their 500th store in Toronto,Canada. The Wendy's Franchise continued to grow more and introduce new items over the years including the super value menu which launched in 1989 and the grilled chicken chicken which came in 1990 because of the an expanding corporate nutrition policy. In 2017, Wendy's has over more than 6,500 restaurants currently in operation in the United States and 29 countries and U.S. territories worldwide. Some of the worldwide restaurants that Wendy's are located in are

To calculate the current ratio, which is one of the most popular liquidity ratios you divide all of firms current assets by all of its current liabilities. McDonalds has $1,819.3 (*everything is in millions for McDonalds) of current assets and $2,248.3 in current liabilities making the firms current ratio .81. In 2005 Wendys has current assets of $266,353 and current liabilities of $296,687 making their current ratio .90. Current ratios are used to represent good liquidity and financial health. Since current ratios vary from industry to industry, the industry average determines if a firms current ratio is up to par, strength or a weakness. In any event if the current ratio is less than the industry average than an analyst or individual interested in investing might wonder why the firm isn't

The Quick Ratio also known as Acid Ratio is used by firms to determine liquidity position. It explains if the firm is able to pay all of their current debt liabilities. (Dyson, 2010) The graph above illustrates that over the period from 2007 to 2011 quick ratio was not more that 1, which means that their debts might not be covered all. The graph also indicates that a peak was in 2011.

(1) Wendy’s was able to achieve its initial success and grow so rapidly at a time when the quick service hamburger business appeared to be saturated because Wendy’s chose a strategic plan of targeting a different segment of the hamburger market, young adults and adults. Dave Thomas’s idea of an “old fashioned” hamburger allowed Wendy’s to differentiate from the competitors. The hamburger itself is made from fresh beef that is cooked to order and served directly from the grill to the customer. It is done this way to allow the customer to see what they are ordering. Allowing customers the opportunity to see the cooking process gains a certain level of comfort between the customer and the restaurant. “Old fashioned” hamburgers are square in

Liquidity ratio. The firm’s liquidity shows a downward trend through time. The current ratio is decreasing because the growth in current liabilities outpaces the growth of current assets. The quick ratio is also declining but not as fast as the current ratio. From 1991 to 1992, it only decreased 0.35 units while the current ratio decreased 0.93 units. Looking at the common size balance sheet, we also see that the percentage of inventory is growing from 33% to 48% indicating Mark X could not convert its inventory to cash.

| This ratio measures a company’s ability to meet its short-term obligations with its most liquid assets, which is why inventory is omitted.

2. Magnetronics had $7,380 invested in accounts receivables at year-end 1999. Its average sales per day were $133,614 during 1999 and its average collection period was 55.23 days. This represented an improvement from the average collection period of 58.68 days in 1995.

The founder of the popular fast food franchise, Wendy’s, is Dave Thomas. He was born in Atlantic City, New Jersey in 1932. Dave’s adoptive mother died when he was still a child. He spent his childhood moving from city to city while his adoptive father tried to find work. Dave spent a lot of summers in Michigan with his Grandmother and she became a huge influence on Dave. She taught Dave the importance of product quality, good service, and respect. Dave did not get a lot of alone time with his father, but when they did they would go eat at neighborhood cafes that sold good burgers. Dave loved watching families sit together and enjoy sharing a meal. These trips to cafes are what led Dave to decide to own a restaurant one day. At age nine, Dave had become an expert on the type of quality and service a business should provide. He began to work in the restaurant business at age 12, but he was fired a lot because he was underage.

These ratios help company in determining its capability to pay short-term debts. Liquidity ratios inform about, how quickly a firm can obtain cash by liquidating its current assets in order to pay its liabilities. General liquidity ratios are: current ratio and quick ratio. Current ration can be obtain by dividing company’s current assets by its’ current liabilities. Generally a current ratio of two is considered as good (Cleverley et al., 2011). Quick ratio also known as acid test determines company’s liabilities that need to be fulfilled on urgent basis. Quick ratio can be obtained by dividing quick assets by current liabilities. Quick ratio is considered as stricter because it excludes inventories from current assets. Generally a quick ratio of 1:1 is considered as good for the company. Higher quick

The quick ratio of 1.46 is a further analysis into the actual monetary values that are highly liquid and excluding fixed assets as part of the assets. The CFO/Avg. current liabilities also show a healthy 73%, 28% in 2004, on average of which is still higher than the industry.

Wendy’s is the third largest hamburger chain and their target market is 24-49 year olds. Wendy’s serve high quality premium (meat never frozen), better tasting old fashioned burgers (burger patty is square which is unique to other hamburger restaurants). The drive through stay open late for late night dining and individual who want fast food but who choose to dine in find that Wendy’s dining room has a home style appeal. Individual seeking a cheap meal can be found on Wendy’s 99 cents menu.

The project proposal will be critical analysed before it will established in South Korea. In the first assignment will looked in depth in political, country risk, FDI theories and motive for the project. In the second assignment, the cost of capital for the project was calculated, stating the risk for both the parent and subsidiaries.