Compare the financial situations of two companies.

Essay by sportsworldUniversity, Master's May 2003

download word file, 12 pages ( 20 KB ) 3.3

Introduction

This report is to compare the financial situations of two companies in the restaurant industry, Darden Restaurants Inc. of Florida and Brinker International Inc. of Texas. The report will provide a detailed analysis and summary of several things including financial analysis, industry history and analysis, both companies history and analysis, vertical and horizontal analysis, and the creditworthiness of each company.

These analysis' that we are going to conduct will provide us with a myriad of information about the two companies and how they compare to each other.

In comparing the companies to each other it is important to take into account the liquidity or ability of a firm to meet its current obligations, and solvency analysis, which is a firm's ability to meet interest payments and other financial long term obligations. Profitability is also very important to gauge along with the activity ratio's which give us insight into how a company is managing its assets and running its business in general.

(Accounting Text and Cases, 10th Edition, By Anthony, Hawkins

and Merchant. New York: Irwin/McGraw-Hill, Inc., 1999. This report will give us in depth analysis on the two companies financial position and will help in determining which company is healthier financially.

History and Development

Restaurant Industry History

The restaurant industry historically has been an increasingly competitive industry and a widespread industry as well. Companies in this industry can compete on a variety of different things including taste of food, quality, service, timeliness of food, atmosphere or different food products.

Darden Restaurants Inc.

Darden Restaurants is the world's biggest restaurant operator. The company is in the business of restaurant dining for customers who enjoy somewhat "relaxed" dining, and eating Italian and seafood in the United States and Canada. (99 Darden Restaurants 1999 Annual Report.) This is evident because as far...