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Analysis
GBA 687
Briana West
Mihaela Gilea
Cesar Cortez
Financial Analysis
Revenues and NIAT
The current and quick ration indicate problems with liquidity, but
these have been improving over the past 3 years.
Activity Ratios
Total Asset Turnover Average Collect Period
Asset turnover is under two showing lower asset base to deliver sales of the
business.
Average collection period is at less than 14 days which is a good indicator.
Leverage Ratios
Debt to Equity Debt to Asset
The z-scores for the company fall within the safe region
Summary of Financial Analysis
The company has been well manage, has
performed well and is in a strong financial
condition.
There is one major aspect that is problematic
which is liquidity. From the liquidity ratios we can
see the business has liquidity problems but
looking at the overall business and the improved
ratios over the past 3 years we can conclude
that this will not be a major problem.
SWOT/TOWS
SWOT
Strengths Weaknesses
Differentiation Liquidity
Strong Management Business Model
Human Resource (Limitation of current
Policy model to open only in
Fun Culture warm climate areas)
Excellent Information
Technology
Franchise Satisfaction
SWOT
Opportunities Threats
Broaden Menu Low entry barriers
Partner and expand to Aging population
non-core markets by Competitors (All food
creating Sonics providers, mom and
express non-drive in pop restaurants,
for cold weather areas. McDonalds, Wendys)
Continue to build in Lower startup costs for
developing markets competitors entering
Attract younger the market
generations
TOWS
SO ST
Customer satisfaction Utilizeexisting
and loyalty supports franchises to
expansion experiment with
healthier products
WO
Change business
model by adding a
sonic express
CURRENT STRATEGY
Market expansion
Differentiation
Development strategy
Market expansion: a multilayered growth
strategy design to diversify potential and strengthen
profitability
Relies on:
Franchise expansion
Same-store sales increases