Question

From the Cheesecake Factory most recent 10-k report from the SEC Edgar website, answer the following questions:

1. Which audit firm conducted the audit of Cheesecake Factory's financial reports?

2.What are some of the business segments Cheesecake Factory operates?

3. What are the total assets for the most recent two years?

4. What was the net income per share (diluted) for the most recent three years?

5. What are competitive strengths of the Cheesecake Factory? - tell me what the term means and what the competitive strengths are specifically.

6. Under Risk Factors, choose two of the factors and give me an example of what the risk factor is addressing (contextualize the risk factor).  

7. Under Item 7 Management's Discussion and Analysis, what are the two adjustments the managers made to calculate non-GAAP net income? Why did the management make these adjustments?

Answer 1

1) KPMG LLP

2) Restaurants, Branded Restaurants run by third parties under licensing agreements, Bakery production facilities and also consumer packaged goods

3) $1,314,133 as on Jan1,2019 and $1,333,060 as on Jan 2,2018

4)$2.83, $3.27 and $2.14 respectively for the fiscal years 2016, 2017 and 2018 respectively

5) Competitive Strengths -ability to anticipate customer preferences and adapt expansive menu to the latest trends

By virtue of their competitive strengths,a company answers why it is different and better than its competitors.Also these strengths when are valuable, rare, inimitable and organisationally exploitable brings sustainable competitive advantage to the company

6 )Risk Factors a) The impact of global and economic conditions on customers discretionary spending e.g. If a country starts categorizing dining out under luxury spending and starts charging inorbitant taxes on dining out, then customers will be reluctant to spend on dining out thus negatively impacting Cheesecake's sales

b)inability to grow comparable restaurant sales could materially adversely affect company's financial performance- abnormal increase in number of competitors in a region can adversely affect customer traffic and thus declining revenues

7)The two adjustments that were made to calculate non-GAAP adjusted net income are:

a)Impairment of assets and lease terminations

b)Deferred Tax revaluations

The Management these changes because they believe that the above two items do not have an impact inldicative of their ongoing operations and that the adjusted measures obtained after eliminating the impact of these two items facilitates the comparison between their past and present performance