FINANCE ASSIGNMENT 2015
PANERA BREADS CO. (PNRA.O)
QUESTION 1
Debt/Equity1
Year Date Debt Equity D/E Ratio
2014 28/12/2014 100,000 736,184 0.14
2013 28/12/2013 0 699,890 0
2012 28/12/2012 0 821,920 0
2011 28/12/2011 0 655,080 0
The Debt/Equity ratio is 0.14 at the end of Q4 in 2014. This increase on previous years was because of the company’s increased long-term debt, which consisted of the firm’s term loan agreement it entered into on June 11, 20142. Compared to its competitors like Starbucks and Chipotle whose Debt/Equity ratios are 0.353and 0.274, Panera Bread is in a good position.
Preferred and Common Stocks
Panera’s preferred stock for the 4th quarter of 2014 was $0 million. Largest proportion of its equity comes from common stock,
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This figure is as a result of the loan it acquired on June 11, which will fund the firm’s operations11, including a range of growth initiatives such as the rollout of Panera 2.09. The 5-year term loan applies a floating rate of interest based on a credit spread to LIBOR based on the company's consolidated leverage ratio12. The borrowing rate at the time of the loan was approximately 1.15%8. Certain of its direct and indirect subsidiaries14 guarantee PNRA’s commitments under the term loan.
At the end of Q3 2014, PNRA had a cash balance of $146 million—compared to $125 million at the end of fiscal year 2013. Cash flows from operations totalled $194 million9. Cash equivalents totalled $146 million11. The large cash reserves and consistent revenue increases each year coupled with the relatively low amount of total debt indicate that the firm is strong financially.
Where the Company Issues Shares
Panera’s common stock is traded under the title “PNRA” on the NASDAQ Global Select Market. The firm reported Q4 2014 diluted EPS of $1.82 and fiscal year 2014 Diluted EPS of $6.6413. As of 19/03/2015, PNRA has an overall market cap of