Bloomin Brands Vs Darden Essay

Darden vs. Bloomin’ Brands
The New York Stock Exchange (NYSE) is the largest stock exchange in the world by market capitalization of its listed companies at 21.3 trillion dollars as of June 2017. Darden Restaurants Inc. has a market capitalization of 10, 220, 360,000 dollars whereas Bloomin’ Brands Inc. has a market capitalization of 1,549,760,000 dollars. However, the two companies have a history of going against each other as major restauranteurs, one owning Olive Garden and the other owning Outback among others, as well as having their own long histories. Provided these two numbers an investor could assume that Darden is a much better company, but they must look at other ratios to determine this. Moreover, certain ratios such as the price

This ratio shows the business’s ability to pay off short-term liabilities with current assets. The last ratio to look at is the quick ratio, which is: (cash plus marketable securities plus accounts receivable) divided by current liabilities. Therefore, it shows the amount of liquid assets available for current liabilities. Darden has an amount of $274,800,000 for cash/cash equivalencies, the market securities for it equal $242,000,000 which are comingled funds, mutual funds, and securities. It also has $43,900,000 in gift cards, landlord allowance is at $3,700,000, miscellaneous is at $16,400,000, and doubtful accounts lowers it $500,000 for a total of $64,000,000. The formula shows that it is $580,800,000/$1,187,100,000 or .49. This means that for each $1 of liabilities that it only has 49 cents of liquid assets to cover

and Bloomin’ Brands Inc. Darden has higher earnings per share, compared to Bloomin’ Brands ($2.92 and $.37, respectively) meaning an investor receives more money per share from Darden then Bloomin’ Brands. Next, Darden has a lower price per earnings ratio which is better since it means that for $1 of company profits you only pay $24.9 for Darden versus $49 from Bloomin’ Brands. Moving to the debt to equity ratio, Darden is lower then Bloomin’ Brands (1.35 to 12.53 respectively) and this consequently means that Bloomin’ Brands are being more aggressive in financing with debt which is a risky move, but also could mean more money if it works out. Darden has a higher current ratio compared to Bloomin’ Brands (.69 to .47 respectively) meaning that it is more successful in paying off current liabilities with current assets. In conclusion, Darden has a higher ratio compared to Bloomin’ Brands (.49 versus .37 respectively) which means for every $1 of liabilities, it would be able to cover 49 cents with liquid assets. Looking at all five of the ratios shows that it would be better to invest in Darden then Bloomin’ Brands if you had the money to do so. Two competitive companies in the restaurant industry trying to be on the top, but as an investor can read from the analysis that there is a reason Darden is biggest full-service restaurant company in the