Strategic management financial data Essay Example | Topics and Well Written Essays - 750 words

Strategic management financial data - Essay Example Importantly it has an excellent reputation for its commitment to being an equal opportunities employer and to corporate philanthropy. Whilst it does not have anywhere near McDonald's market share, over the last five years its stock has consistently outperformed McDonald's: Figure 2: Yum v McDonald's 2002-2007 Source: Marketwatch.com According to the CEO, David Novak, Yum! claims an annual return for investors of 24% between 2000-2005. Little wonder he refers to the company as "a demonstrated cash machine with a strong investment grade balance sheet". 2 Revenue Growth Last 5 Years3 I have presented both the raw figures, taken from the 2001-2005 Annual reports respectively and calculated the revenue growth rate using the formula: Growth multiple: (current year/last year) = 1.344599 Growth % rate: Growth multiple - 1 x 100 =Annualised Growth last 5 years To work out the annualised growth rate between 2005 and 2000 I used the following formula: Time = 5 Growth multiple = 1.344599 = 1.061008 Then subtract 1 and multiple by 100 = 6% Operating Expenses as a % Revenue I calculated this figure using the formula: Operating expenses/revenue*100 Gross Profit Margin (GPM) I found this information on the Income statement and used the following calculation: To Calculate Gross Profit Net Sales (NS) minus Cost of Sales =Gross Profit (GP) GPM = GP/NS Market Capitalization I found 2 definitions for capitalization Definition 1 The sum of a corporation's long-term debt, stock and retained earnings. Also called invested capital. Definition 2 The market price of an entire company, calculated by multiplying the number of shares outstanding by the price per share. here also called market cap or market...Importantly it has an excellent reputation for its commitment to being an equal opportunities employer and to corporate philanthropy. According to the CEO, David Novak, Yum! claims an annual return for investors of 24% between 2000-2005. Little wonder he refers to the company as "a demonstrated cash machine with a strong investment grade balance sheet". 2 Figures 5-6: In the last 2 years Yum! has struggled to outperform the market. This is consistent with the difficulty in sustaining a competitive advantage. Markets trend toward competitive convergence as competitors copy operational efficiencies. However since October 2005 (Figure 5) Yum! has easily outperformed the Dow Jones US Restaurant & Bars index. Figure 9 provides the contrast between Yum! and the Dow Jones US Restaurant & Bars index over the last 5 years. With the exception of a 'blip' in 2002-3 when Yum! was no better or worse than the Dow Jones US Restaurant & Bars index, Yum! has outperformed its sector overall in each of the last 5 years.