Cash Flow Case Study Example | Topics and Well Written Essays - 750 words

Cash Flow - Case Study Example Yum Brands Inc. operates six in different segments including YUM Restaurant International, Pizza Hut (US), Taco Bell (US), KFC (US), A&W All American Food Restaurant (US), YUM Restaurant China and LJS Long John Silver’s (US). This paper comments on the difference between net cash provided by operating activities and net income by speculating on which is likely to be superior sign of profitability for the firms in the long term. The paper also comments on the data reviewed by each firm and analyze cash flow position of each firm. After analyzing the cash flows of the companies as per the information given in the case, the paper finally ends with a conclusion that comments on whether these companies has any cash flow problems or not. Net Cash Position of the Firms According to the given case study, the financial statements of the three restaurant firms for the financial year 2009 and 2010 was extracted from their respective form 10-K annual reports and the following results were found: It is important to mention that the net income of all three companies include non-controlling interest (that is, non-equity shareholders). From the above analyses it is clear that there is difference between net cash provided operating activities and net income including non-controlling interest. ... On the other hand, net income including non-controlling interest is the income of the company from all its operations and also includes external finances such as non-controlling interest (which is basically earnings from preferential equity or other fixed financial instruments). The value is not adjusted for non-cash incomes or expenditures such as working capital and depreciation (Porter and Norton, 2010, pp.666-676). Also, it does not classify exact cash amount realised from operations. This is main reason as to why there was difference between net income including non-controlling interest and net cash provided operating activities. Regarding the speculation of which number is likely to be better indicator of long term profitability, it is generally believed that net cash provided by operating activities is better indicator. This is because it is useful to determine whether the firms will be able to make necessary future investment and pay its dues in the long term. The companies m ay look great from their balance sheet and income statements, but if there isn’t sufficient cash, then it might run risk of liquidation (Plewa, 1995, pp.1-18). Data Review of the Firms The summarized data review of the three firms reveals the following results: Operating cash flow/total debt – It represents the amount of total debt that could be covered from the cash flows generated by the firms from operating activities. Higher values indicate that there is sufficient cash to repay total debt. Among the three firms under observation, this ratio was highest for Panera Bread and there was a general increasing trend in the values. Operating cash flow per share – It indicates exactly how much of

Standardization and Adaptation Essay Example | Topics and Well Written Essays - 2500 words

Standardization and Adaptation - Essay Example Finally, in 1961, the McDonald’s brothers sold the whole share to Mr. Kroc for $2.7 million. In 1967, McDonald’s had opted for its first international venture in Canada. Shortly after that, the license of Eastern Canada’s business of McDonald’s was bought by George Cohon, who had opened the first restaurant in the year 1968. The key to international success of McDonald’s was the use of Franchising. By franchising through the local people, the delivery of the products and the interpretation of their US brands to the local people regarding product and services became much easier. In this context, the report focuses on the adaptation and the standardization conformed by McDonald’s and how it had led to their success. Standardization Standardization signifies creation of a consistent way for carrying out procedures and tasks. Standardization can be related to any process that is being carried out in the organization such as, machinery standardiza tion, operation standardization, drawing standardization, inventory standardization, communication standardization and clerical process standardization. Operation standardization signifies that the operation can be conducted by any one. ... This is implemented within the organization to ensure that the end product of the organization is of consistent quality and is easily comparable to other products of same class. Standardization is seen to be adopted by various business processes when the organizations aim to achieve consistent level of quality. For instance, in case of fast food franchises, detailed outlines are provided regarding the preparation of food so that the customers experience the same taste and flavour, regardless of the franchise of the chain that they are visiting. Adaptation related to the environmental demands often requires non-trivial changes related to the structure, ideology and technology of the organization. There are several dimensions along which the organizational adaptation are implemented; for instance, the changes in the core features such as, technology along with changes in more peripheral characteristics such as, changes in the advisory team. Adaptation Adaptation is defined as the alter ations made to the system due to the forces that lead to the changes in the business climate. Organizational adaptation is defined as the response that the organization generates through changes in ideology, technology and structure due to the changes in the environmental opportunities and demand. The performance of the organization is dependent on a large number of factors that are related to the business environment and therefore, adaptation becomes important for the organization. This does not imply that an organization requires constant adaptation to the environment because if the business environment is stable, then it requires very little adaptation (D’aunno and Price, 1985; Huq, et al., 2003; Kammerlander, 2013).