Use current public financial statements for Wing Stop to determine the following:
1. What is their sustainable growth rate based on earnings?
2. How has their historical growth compared to sustainable growth and what methods do they appear to have used to reduce the gap between the two?
3. Assuming the company’s growth doubles from recent trends, what challenges will the organization encounter and what is your recommendation to achieve growth?
| Year ended | |||||
| (in thousands) | December 30, 2017 | December 31, 2016 | December 26, 2015 | December 27, 2014 | December 28, 2013 |
| Consolidated Statements of | |||||
| Income Data: | |||||
| Revenue: | |||||
| Royalty revenue and | $ 68,483 | $ 57,071 | $ 46,688 | $ 38,032 | $ 30,202 |
| franchise fees | |||||
| Company-owned restaurant | 37,069 | 34,288 | 31,281 | 29,417 | 28,797 |
| sales | |||||
| Total revenue | 105,552 | 91,359 | 77,969 | 67,449 | 58,999 |
| Cost and expenses: | |||||
| Cost of sales | 28,745 | 25,308 | 22,219 | 20,473 | 22,176 |
| Selling, general and | 37,151 | 33,840 | 33,350 | 26,006 | 18,913 |
| administrative | |||||
| Depreciation and | 3,376 | 3,008 | 2,682 | 2,904 | 3,030 |
| amortization | |||||
| Total costs and | 69,272 | 62,156 | 58,251 | 49,383 | 44,119 |
| expenses | |||||
| Operating income | 36,280 | 29,203 | 19,718 | 18,066 | 14,880 |
| Interest expense, net | 5,131 | 4,396 | 3,477 | 3,684 | 2,863 |
| Other expense (income), net | - | 254 | 396 | 84 | (6) |
| Income before income taxes | 31,149 | 24,553 | 15,845 | 14,298 | 12,023 |
| Income tax expense | 3,845 | 9,119 | 5,739 | 5,312 | 4,493 |
| Net income | $ 27,304 | $ 15,434 | $ 10,106 | $ 8,986 | $ 7,530 |
| Consolidated Statement of | |||||
| Cash Flows Data: | |||||
| Net cash provided by | $ 27,049 | $ 23,329 | $ 13,860 | $ 15,119 | $ 11,481 |
| operating activities | |||||
| Net cash provided by (used | (6,484) | (2,056) | (1,915) | (363) | (2,144) |
| in) investing activities | |||||
| Net cash provided by (used | (20,252) | (28,213) | (10,978) | (8,206) | (10,417) |
| in) financing activities | |||||
| Net increase (decrease) in | $ 313 | $ (6,940) | $ 967 | $ 6,550 | $ (1,080) |
| cash and cash equivalents |
In: Finance
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows:
| 2021 | 2022 | 2023 | |||||||
| Cost incurred during the year | $ | 2,550,000 | $ | 4,250,000 | $ | 1,870,000 | |||
| Estimated costs to complete as of year-end | 5,950,000 | 1,700,000 | 0 | ||||||
| Billings during the year | 2,050,000 | 4,750,000 | 3,200,000 | ||||||
| Cash collections during the year | 1,825,000 | 4,100,000 | 4,075,000 | ||||||
Westgate recognizes revenue over time according to percentage of completion.
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
2021 2022 2023
Revenue ______ _______ ________
Gross P _______ _______ ________
2-a. In the journal below, complete the
necessary journal entries for the year 2021 (credit "Various
accounts" for construction costs incurred).
2-b. In the journal below, complete the necessary
journal entries for the year 2022 (credit "Various accounts" for
construction costs incurred).
2-c. In the journal below, complete the necessary
journal entries for the year 2023 (credit "Various accounts" for
construction costs incurred).
3. Complete the information required below to prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract.
4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.
| 2021 | 2022 | 2023 | |||||||
| Costs incurred during the year | $ | 2,550,000 | $ | 3,825,000 | $ | 3,225,000 | |||
| Estimated costs to complete as of year-end | 5,950,000 | 3,125,000 | 0 | ||||||
2021 2022 2023
Revenue ______ _______ ________
Gross P _______ _______ ________
5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.
| 2021 | 2022 | 2023 | |||||||
| Costs incurred during the year | $ | 2,550,000 | $ | 3,825,000 | $ | 3,975,000 | |||
| Estimated costs to complete as of year-end | 5,950,000 | 4,150,000 | 0 | ||||||
2021 2022 2023
Revenue ______ _______ ________
Gross P _______ _______ ________
In: Accounting
Provide three reasons why an auditor presumes that there are
potential risks of fraud
relating to revenue recognition in entities. Make sure that you
explain your reasons
clearly.
In: Finance
Question: During the year, a company recorded prepayments of expenses in asset accounts, and cash receipts of
unearned revenues in liability accounts. At the end of its annual accounting period, the company must
make three adjusting entries:
(1) Accrue salaries expense. Dr. ___ Cr. ___
(2) Adjust the Unearned Services Revenue account to recognize earned revenue. Dr. ___ Cr. ___
(3) Record services revenue earned for which cash will be received the following period. Dr. ___ Cr. ___
For each of the adjusting entries (1), (2), and (3), indicate the account to be debited and the account to be
credited—from a through i below.
a. Prepaid Salaries d. Unearned Services Revenue g. Accounts Receivable
b. Cash e. Salaries Expense h. Accounts Payable
c. Salaries Payable f. Services Revenue i. Equipment
In: Accounting
Why is pricing an extremely important component of marketing? List 3 aspects of pricing that make it important to marketing, to the organization, and to its customers. Think of things that are unique to the pricing variable compared to the other three marketing variables of product, promotion, and distribution.
In: Economics
A company wants to know how job performance relates to IQ. They collect data on 30 employees, resulting in the following table. Enter the data into SPSS OR EXCEL with appropriate variable labels. Show all syntax and output. (5pts)
|
Name |
Job Performance |
IQ |
|
Henry |
85 |
109 |
|
Riley |
84 |
106 |
|
Alexis |
87 |
125 |
|
Evelyn |
69 |
84 |
|
Blake |
69 |
89 |
|
Dominic |
81 |
109 |
|
Jose |
71 |
121 |
|
Tristan |
76 |
102 |
|
Kayden |
77 |
111 |
|
Makayla |
76 |
106 |
|
Ella |
90 |
107 |
|
Piper |
74 |
97 |
|
Jonathan |
74 |
133 |
|
Joshua |
65 |
96 |
|
Brooklyn |
66 |
97 |
|
Connor |
73 |
116 |
|
Sadie |
80 |
108 |
|
Zoe |
96 |
102 |
|
Cameron |
77 |
94 |
|
Jason |
73 |
98 |
|
Logan |
70 |
87 |
|
Olivia |
68 |
104 |
|
Madison |
66 |
85 |
|
Lucas |
86 |
145 |
|
Tyler |
88 |
105 |
|
Madeline |
82 |
96 |
|
Michael |
85 |
103 |
|
Mason |
78 |
115 |
|
Andrew |
87 |
135 |
|
Joseph |
72 |
104 |
In: Statistics and Probability
|
Height (inches) |
Sleep (hours) |
Gender |
|
61 |
7 |
M |
|
62 |
7 |
F |
|
63 |
5 |
F |
|
63 |
7 |
F |
|
64 |
6 |
F |
|
65 |
8 |
F |
|
65 |
7 |
F |
|
66 |
8 |
F |
|
66 |
5 |
M |
|
67 |
8 |
M |
|
67 |
8 |
F |
|
67 |
4 |
F |
|
67 |
8 |
F |
|
68 |
8 |
M |
|
68 |
6 |
M |
|
69 |
8 |
M |
|
69 |
8 |
M |
|
69 |
8 |
M |
|
69 |
7 |
F |
|
69 |
10 |
M |
|
69 |
6 |
F |
|
69 |
7 |
M |
|
70 |
8 |
F |
|
70 |
5 |
F |
|
70 |
8 |
F |
|
70 |
7 |
F |
|
70 |
7 |
M |
|
71 |
4 |
M |
|
71 |
9 |
M |
|
71 |
8 |
M |
|
73 |
7 |
F |
|
73 |
7 |
M |
|
74 |
8 |
M |
|
74 |
8 |
M |
|
75 |
10 |
M |
In: Statistics and Probability
A club professional at a major golf course claims that the course is so tough that even professional golfers rarely break par of 73. The scores from a random sample of 20 professional golfers are listed below. Find the test statistic x to test the club professional's claim. 72 70 73 73 76 75 67 79 73 78 70 72 74 74 81 79 73 75 76 66
Answer choices: 6, 10, 4, 14
In: Statistics and Probability
A test of abstract reasoning is given to a random sample of students before and after they completed a formal logic course. The results are given below. Construct a 95% confidence interval for the mean difference in tests scores. Research has shown that the distribution of such differences is approximately normal. Interpret your result.
| Before | 74 | 83 | 75 | 82 | 80 | 63 | 93 | 84 | 91 | 77 |
| After | 73 | 77 | 70 | 77 | 74 | 67 | 95 | 83 | 84 | 75 |
In: Statistics and Probability
A manufacturer of plastic products spent $2,400,000 during the course of 2004 on research and development. $800,000 of this was spent on an unsuccessful attempt to design new and cheaper moulds which would have lasted twice as long as the moulds currently in use; this proved impossible because the moulds would not sustain the temperature of the molten plastic. $1,200,000 was spent on a very successful project to enable the gnomes to be cast in a cheaper form of plastic, and the remaining $400,000 was spent in the rental, heating and lighting costs of the research and development office.
Required: Advise the manufacturer how the expenditure of $2,400,000 should be treated in the income statement (Statement of Profit & Loss) and balance sheet (Statement of Financial Position). Explain your reasoning carefully and indicate any assumptions you make.
In: Accounting