07 Jun Question Analysis of Bob Evans Farms Inc. (BOBE)
Question
Analysis of Bob Evans Farms Inc. (BOBE)
You work in the Treasurer’s office of BOBE and report directly to the CFO, Mr. Mark E. Hood. Mr. Hood has asked
that you provide a five year time-trend analysis of BOBE. Using both common-size statements and ratio analysis, you
will analyze trends over the past five years to evaluate the overall health of the firm, including the development of any
strengths and weaknesses over the past five years. In addition, Mr. Hood has also asked that you conduct a crosssectional analysis of BOBE against its competitors for the most recent fiscal year-end (FYE). While BOBE has many
competitors, we will include only three in our analysis (just to make life a little easier). The cross-sectional analysis is
based upon ratio analysis only and will compare BOBE to its competitors AND the overall industry averages. Keep in
mind that certain strengths or weaknesses that you identify by looking solely at the numbers may not actually be a
strength or weakness when you consider any "special conditions" that may have led to these numbers. For example,
a firm that has a large cash outlay in one period for a long-term capital budgeting project will, ceteris paribus,
experience a large decrease in cash and a large increase in total assets that lead to lower liquidity ratios, lower total
asset turnover, and lower ROA & ROE. As long as these numbers are temporary and due to the large capital
expenditure, it is not really a weakness of the firm as the project is expected to increase the overall value of the firm
in the long-run. Obviously, it is in the best interest of the firm to divulge any special conditions to its stakeholders.
This is done through the "Notes to Financial Statements" that are included in the 10-K report. They are also often
mentioned in the transcripts of the conference call that takes place when the firm formally announces its earnings to
the public. The earnings announcement is usually made a few days prior to the 10-K "filing date" in the SEC’s Edgar
files. For example, the filing date of the most recent 10-K report for BOBE is listed as 6/19/2015 while the official
announcement of earnngs to the market was made on 6/17/2015. Transcripts from earnings announcements (or any
company announcements) can usually be found under the "Headlines" tab in Yahoo! Finance (on the left-hand side
after you enter the ticker and go to the firm’s page) or on the company’s own website (BOBE has an "Investors" tab
on their website homepage at the bottom).
Required:
1) Obtain the most recent 10-K report for BOBE from the SEC’s Edgar files at:
http://www.sec.gov/edgar/searchedgar/companysearch.html
– Under "fast search", enter the ticker for Bob Evans (BOBE)
– Find the most recent 10-K report and click on "interactive data"
– Click on "financial statements" on the left
– "Notes to financial statements" is also on the left
2) Use BOBE’s 10-K annual report from Edgar to find financial information for analysis
– Click on the ‘Income Statement BOBE’ tab below and use the information from "Consolidated
Statements of Net Income" in Edgar to fill in the highlighted area of the spreadsheet for FYE 4/24/2015.
Note: I have already included the previous 4 years’ information to guide you.
– Click on the ‘Balance Sheet BOBE’ tab below and fill in the information from "Consolidated Balance
Sheets" from Edgar to fill in the highlighted area of the spreadsheet for FYE 4/24/2015.
Note: I have already included the previous 4 years’ information to guide you.
– The common-size perentages are already formulated and will appear as you fill in the income statement
and balance sheet information for 2015.
3) The ‘Ratios BOBE’ tab below contains the ratios for BOBE for FYE’s 2011-2014. It also contains the ratios of
BOBE’s three competitors and the industry averages. The competitors are:
– Denny’s Corp. (DENN): Denny’s Restaurants
– DineEquity Inc. (DIN): Applebee’s and Int’l House of Pancakes Restaurants
– Brinker’s Int’l (EAT): Chili’s and Maggianos Restaurants
You are to fill in the ratios for BOBE for FYE 2015 using formulas that reference back to the income
statement and balance sheet. Entering the raw numbers without formulas will result in a significant
deduction in points.
4) Conduct the time-series and cross-sectional analysis for BOBE. The analysis involves the interpretation of the
common-size statements and ratio numbers as well as research into the "notes to financial statements" and the
company announcements that may explain the numbers. (hint: also look at other "headlines" in Yahoo! Finance for
BOBE around the time of the earnings announcment for additional insights). This may also include some research of
BOBE’s competitors in order to identify why they are so much better/worse than BOBE in certain areas. You will turn
in the report as a word document along with the spreadsheet. You will address the report to Mr. Hood and
use the following guidelines: minimum of 1 full page and a maximum of 2 full pages EXCLUDING any tables,
The report is required to be a
graphs, or references. If you have any of these, you can use another page(s). You will use Times New Roman
(12 pt.) font with ‘multiple’ spacing at 1.15. The ‘before’ and ‘after’ spacing will be set at 0 pt. and margins will
be set to ‘normal’.
• If you are unsure about any of these settings, please ask!
ALL work submitted is assumed to be the original work of the student, in the student’s own words, and any
material copied from other sources needs to be properly cited and in quotation marks, where appropriate.
Please refer to the ‘Academic Integrity Policy’ in the syllabus for further details on plagiarism and penalties
for minor and major infractions.
Bob Evans Farms Inc. (BOBE)
Income Statement
In Thousands of US $
Net Sales
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