Bbi Case Study Financial Health

A. Financial Analysis
Although BBI enjoys a history of profitability, as previously discussed. This section explores more fully the financial health of BBI. The company recently published its annual 10K form, which contains some disturbing financial information. For example, Appendix Q depicts the relationship between BBI’s total return for its stockholders as compared to the return one would have had holding a composite of all 500 of the Standard and Poor’s stocks. What this chart reveals are that BBI outperformed the Standard and Poor stock portfolio for the first three years; however, BBI significantly underperformed compared to these stocks for the last two years. Although this is a relatively short time period, it could suggest a trend

Selected financial ratios, growth trends, and industry averages for BBI and its two closest rivals, Darden and DineEquity, are included in Appendix S (CSI Market, 2017). This data reveals conflicting results. For example, during the past year, BBI experienced a decline in revenue growth at a rate of -2.86%, which was less than Darden’s rate of 1.3%, but better than DineEquity’s rate of -6.92%. Moreover, the industry standard for revenue growth was basically flat last year at a rate of a meager 0.16%. Thus, BBI did better than one major competitor, but worse than another, while falling somewhat less than the industry standard. Conversely, the analysis of earnings per share (“EPS”) suggests that BBI failed to perform as well as its competition. In this case, BBI suffered a decline of -65% in EPS, while Darden enjoyed an increase of 78%, and DineEquity suffered a decline of only -3.5% in EPS. This analysis is bad for BBI when compared to its competition. Another conflicting ratio is a comparison of the price to earnings ratio (“PE”) when compared to the current stock performance. In this case, BBI suffers an extremely high PE ratio of 56.37, which is more than double the industry standard of 22.94, yet BBI has achieved a current stock increase of 14.91%. Similarly, a review of the performance of Darden and DineEquity for these categories also reveal conflicting