hw3fsae.doc

# hw3fsae.doc - Jaegook Lee G26205244 Third Homework A...

• Homework Help
• 2

This preview shows page 1 - 2 out of 2 pages.

Jaegook Lee G26205244 Third Homework A separate file includes the financial statements and part of MD&A for Potbelly Corporation. Use Potbelly’s financial statements to answer question 1 and 2. Cost of sales consists of the cost of the food it serves. 1. a. Calculate the cost of goods sold to revenue ratio and the labor and related expenses to revenue ratio for 2015 and 2016. CoGS / Rev Labor and related expense / Rev 2015 (105,614/372,849)=28.3% (106,628/372,849)=28.6% 2016 (111,026/407,131)=27.27% (117,838/407,131)=28.9% b. In its Management Discussion and Analysis discussion, Potbelly discusses the effect of state-mandated minimum wages. What ratio in the common size income statement changed as a result of that change and did it increase or decrease? Is the overall change in that common size income statement ratio (as shown in part a) in the same direction as the change due to the change in minimum wages? It is possible that other factors shifted the ratio in the other direction. As a result of statutory wage change, the labor and related expense went up, so Labor and related expense to revenue ratio increased as well. However, as they disclosed in the note,

Subscribe to view the full document.

{[ snackBarMessage ]}

###### "Before using Course Hero my grade was at 78%. By the end of the semester my grade was at 90%. I could not have done it without all the class material I found."
— Christopher R., University of Rhode Island '15, Course Hero Intern

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern