A business must make a profit to continue in business. One of the elements used to determine the profitability and the performance of a business is the financial statement that shows the financial position in terms of revenue and operating cost. Business owner's, investor's and stockholder's rely on this financial information to make appropriate and decisive decisions.
In Landry's Restaurant, the net income is showing as$45,901,054 in year 200310.5% increase from year 200241,521,616in year 200254.2% increase from year 200126,919,569 in year 2001The income statement shows the changes over the past three years. For instance, the net income has increased from $41,521,616 in year 2002 to $45901054 in year 2003 with percentage change of (10.5 %). Also, from $26,919,569 in year 2001 to $41,521,616 with percentage change of (54.2%) On the other hand, operating cost has increased by (24.9 %) in year 2003 and (18.9%) in year 2002. Stockholders and investors need to know whether the Landry's Restaurant is a profitable business to invest in or not.
Increase in revenue by the end of 2003 (23.6%) and 2002 (19.8 %) indicates that the business is generating profit; however, the net income has decreased in year 2003 compare to year 2002 by (80.6%) Although the business still is generating profit, the net income has sharply declined in the last year indicating that there might be further drop in its total net income for the following year unless management makes appropriate decisions to enhance its performance and profitability. Also, stockholders and investors will re-evaluate their financial investment with Landry's Restaurant.
Further, the statement shows the followingÃ¢ÂÂ¢Cost of revenuesÃ¢ÂÂ¢Restaurant labourÃ¢ÂÂ¢Other restaurant operating expensesÃ¢ÂÂ¢General and administrative expenseÃ¢ÂÂ¢Depreciation and amortizationÃ¢ÂÂ¢Asset impairment expenseÃ¢ÂÂ¢Restaurant pre-opening expensesÃ¢ÂÂ¢Total operating costs and expensesÃ¢ÂÂ¢Operating incomeÃ¢ÂÂ¢Interest expensesÃ¢ÂÂ¢Income taxesÃ¢ÂÂ¢Net incomeManagement uses the income statement to evaluate its performance internally. Investors and stockholders...