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Analysis of the Company Yum! Brands, Inc.

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1. Introduction In the module strategic hospitality management an analysis of the company YUM! Brands, Inc. will be made. The second week of the module especially focuses on the internal analysis of YUM!. In order to understand the internal analysis process, books are red on the topic. This will be done in order to define the strengths and weaknesses, resources, capabilities and the development of competitive and strategic advantages. The lectures and workshops provided important information and contributed to the learning outcomes of this week. These outcomes together will be related to YUM!. The internal environment will be analysed by discovering the vision, mission goals and strategies of YUM!. These aspects together will be …show more content…

With the profit margin the ability to generate profits on sales of the YUM Corporation can be determined. It can be calculated by the net income divided by the total revenue*100. In 2008 the profit margin of the YUM corporation is 8.53% and in 2010, 10.21%. This is an increase of 1.68%. The outcome percentage of the profit margin is also an overall measurement of the management’s ability to control expenses. The last ratio which has to be calculated for the YUM Brand Corporation is the working capital. The working capital can be calculated by the current assets divided by the current liabilities. The higher the revenue the greater the amount of working capital. The working capital turnover in 2008 is -10.59, in 2009 -13.05 and in 2010 -31.72. This is a negative increasing of almost 300%. Furthermore, it is important to calculate some relevant general ratios. Therefore, the Return on Assets (ROA) and the Return on Equity (ROE) will be calculated. The ROA is a key indicator of the profitability, while the ROE is a key indicator that compares the profit of YUM Brand Corporation to the shareholders investment. The ROA in 2008 is 9.5% and increases in 2009 to 10.29%, while it goes back in 2010 to 9.74%. The above written percentages from 2008 to 2010 compares the bottom line profits to the total investment and can be used to measure the performance of corporations operations.

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