Introduction

Clive Watson, David Bruce, and John Roberts co-founded the Group in October 2011
with the goal of developing a high-quality portfolio of premium pub assets primarily in
London, Cathedral cities, and market towns throughout southern England and Wales. The
Companies began operations in March 2012 and had acquired six pubs by the end of the year,
including its first locations in Bath, Cambridge, and Oxford. The City Pub Group owns and
operates a portfolio of premium pubs in the south of England and Wales. The Group's pub
estate consists primarily of 41 free houses located primarily in London, Cathedral cities, and
market towns, each of which is focused on appealing specifically to its local market, with
three additional sites set to open in Spring/Summer 2022. The Group's portfolio consists
primarily of freehold, managed pubs that offer a diverse range of high-quality drinks and
food tailored to the customers of each of its pubs. The first pub opened in March 2012, and
the estate quickly expanded to 34 locations by November 2017, when The City Pub Group
was formed through an all-share merger of the two original companies. The City Pub Group
completed its initial public offering (IPO) in November 2017, when the shares were admitted
to trading on AIM. The City Pub Group uses its industry contacts and experience to ensure
that it is well-positioned to acquire high-quality, well-located freehold or leasehold pubs.
Following acquisition, it intends to increase profitability through targeted investment in each
pub, incentivization of key employees, implementation of its flexible retail strategy,
dedicated marketing, and use of its centralised purchasing power. Next, for Darden
Restaurant, it is a company features most of the successful and recognizable restaurants for
full-service dining such as Yard House and The Capital Grille. Darden's origins can be traced
back to 1938, when Bill Darden opened his first restaurant, The Green Frog. Darden chose
Lakeland because he wanted to test the viability of a seafood restaurant in a non-coastal area
and Lakeland was the most inland city in Florida. The first Red Lobster franchise was praised
by both diners and critics. By 1970, the store had expanded to three locations within the state,
with two more under construction. Even though the locations were profitable, the company
lacked the means to expand, so Darden sold the company to food giant General Mills. The
company's digital strategy, which allowed customers to order outside from the restaurant and
simplified the wait, pickup process, and payment speed, was working. Overall, total sales
increased by 4.1 percent. CEO of Darden’s Restaurant, Mr Eugene uses a strategy called
“back to basics” to improve their business such as focus on service, keep on improving the
food and the atmosphere.
Calculation of City Pub

LIQUIDITY RATIO:    
     
  2017 2018
Current Ratio 1.35 0.75
Quick Ratio 1.26 0.60
Cash Ratio 1.00 0.34
     
     
ASSET MANAGEMENT RATIO:    
     
  2017 2018
Inventory Turnover 18937.25 15351.39
Days' Sales In Inventory 0.02 0.02
Accounts Receivable Turnover 279.10 218.54
Average Collection Period (ACP) 1.30 1.67
Accounts Payable Turnover 4.36 3.35
Accounts Payment Period (APP) 83.75 108.90
Fixed Asset Turnover 0.55 0.51
Sales to Working Capital 16.77 -21.35
Total Assets Turnover 0.47 0.55
Capital Intensity 2.11 1.82
     
     
DEBT MANAGEMENT RATIO:    
     
  2017 2018
Debt Ratio 0.10 0.15
Debt-to-equity 0.11 0.17
Equity Multiplier 1.11 1.09
Times Interest Earned -0.26 13.78
Fixed-charge Coverage 6.23 41.36
Cash Coverage 7.32 68.79
     
     
PROFITABILITY RATIO:    
     
  2017 2018
Gross Profit Margin 74.18 74.56
Operating Profit Margin -0.70 5.73
Profit Margin 1.91 2.87
Basic Earnings Power (BEP) 0.00 0.03
Return on Assets (ROA) 0.01 0.02
Return On Equity (ROE) 0.01 0.02
 Dividend Payout 99.60 58.04

MARKET VALUE RATIO:

  2017 2018
Market-to-book Ratio: 128.05 134.79
Price Earnings Ratio: -6600.41 4867.44

Ratio Explanation

For the liquidity ratio of current ratio of City Pub in 2017 was 1.35 times and it
decreases much as 0.30 times in 2019 because that City Pub increase in short-term debt and
decrease in current assets. Besides that, for cash ratio it was 1 time and shows downward
trend to 0.34 times in 2018 because that City Pub does not have enough ability to generate
cash that time. For asset management ratio, the inventory turnover of City Pub is 18937.25
times, and it shows a downward trend until 2019 which is 14325.69 times because that City
Pub might have a weak sales team those year. For account receivable turnover, from 2017
279.10 times show a massive downward trend to 2019 which is 149.30 times because they
are not able to collect payment from debtors which caused bad debt. Debt management ratio,
debt ratio increases from 2017 to 2019 which is 0.10% to 0.44% because their ability to pay
their creditor poor which cause them hard to borrow loan form bank. Next, debt-to-equity
decreases each year from 2019 to 2021 which is 0.84 times to 0.63 times because City Pub
have less debt. For profitability ratio, gross profit margin shows an upward trend from 2017
to 2021 which is 74.18% to 76.80% because City Pub may have found a lower-priced
supplier so that they can reduce their cost for more profit. Return on equity increases 0.01%
to 0.03% because they earn profit with lesser capital. Finally, for market value ratio, the
market-to-book ratio increase from 2017 to 2019 which is 128.05 times to 182.30 times. This
is because that the stock price of City Pub is getting more value and become expensive. Next,
the price earnings ratio increases from 2017 to 2019 which is -6600.41 times to 9432.27
times, this shows that investor have high expectation on City Pub that it will grow up to a big
company one day.

Industry Analysis
 In 2021, the average current ratio for the industry is 1.70 times and City Pub company
is 1.20, it is below average and means that City Pub have more short-term debt and cause
them weaker than other company. For cash ratio in 2021, it is 1.03 and for the company it is
0.89. This is because City Pub only have lesser ability to generate cash in time than other
company. Next, the average inventory turnover of 2021 is 952.84 and City Pub have 9449.46
which means that it is above average, and it is because that City Pub have a good sales team
that maintain their sales a lot than other company. Besides that, For the average account
receivable turnover in 2021 is 17.43 and for the company which is 52.47. It is above the
average quite a lot and it is because City Pub is not able to collect payment from their
debtors. For the average debt ratio in 2021, it is 0.85% and for City Pub, it is 0.39 and is
below average. This is a good sign because their ability to pay creditors is good and this lead
them can easily borrow loan from bank. The average debt-to-equity of 2021 is -1.71 times
and for City Pub, it is 0.63 times, and it is above average means that City Pub have a lot of
debts that haven’t received. Next, for the average gross profit margin in 2021 is 10.37% and
the company is 76.80% means that City Pub may have a found a good way to reduce their
cost to earn more profit such as they may have found a lower-priced supplier. For the average
return on equity on 2021, it is -1.45% and City Pub is -0.03% and it is above average. This
shows that City Pub is able to earn more profit with lesser capital. Besides that, for the
average market-to-book ratio in 2021, it is -4264.54 times and for City Pub, it is 109.71. It is
higher than average a lot and means that the stock price of City Pub is expensive than other
company which mean they are high in value. Finally, the average price earnings ratio in 2021
is 2443.98 times and for City Pub, it is -3460.14 and it is below average. This sign shows that
investor is not expect a lot on City Pub that it will grow stronger in the future.

Calculation of Darden Restaurant

LIQUIDITY RATIO:      
       
  2017 2018 2019
Current Ratio 0.62 0.40 0.62
Quick Ratio 0.48 0.40 0.46
Cash Ratio 0.18 0.11 0.40
       
       
ASSET MANAGEMENT RATIO:      
       
  2017 2018 2019
Inventory Turnover 36.65 38.07 37.22
Days' Sales in Inventory 9.96 9.59 9.81
Accounts Receivable Turnover 0.10 0.10 0.10
Average Collection Period (ACP) 3.56 3.60 3.69
Accounts Payable Turnover 1.02 1.05 1.09
Accounts Payment Period (APP) 359.44 346.88 334.49
Fixed Asset Turnover 3.13 3.33 3.33
Sales to Working Capital -14.55 -9.72 -14.64
Total Assets Turnover 1.29 1.48 1.44
Capital Intensity 0.77 0.68 0.69
       
       
DEBT MANAGEMENT RATIO:      
       
  2017 2018 2019
Debt Ratio 0.62 0.60 0.59
Debt-to-equity 1.62 1.49 1.46
Equity Multiplier 2.62 2.49 2.46
Times Interest Earned 15.85 3.76 15.58
Fixed-charge Coverage 23.43 6.72 23.67
Cash Coverage 22.15 5.55 21.74
       
       
PROFITABILITY RATIO:      
       
  2017 2018 2019
Gross Profit Margin 8.81 9.49 9.78
Operating Profit Margin 8.95 7.50 9.19
Profit Margin 6.73 7.38 8.38
Basic Earnings Power (BEP) 0.12 0.11 0.13
Return on Assets (ROA) 0.09 0.11 0.12
Return On Equity (ROE) 0.23 0.27 0.30
Dividend Payout 545896.10 464016.91 413944.64
       
       
MARKET VALUE RATIO:      
       
  2017 2018 2019
Market-to-book Ratio: 5.25 4.75 6.13
Price Earnings Ratio: 22.84 17.84 20.61
Ratio Explanation

For liquidity ratio, the quick ratio decreases from 2017 to 2018 which is 0.48 times to
0.40 times because that Darden Restaurants have lesser liquidity assets than liabilities such as
lack of account receivable and numerous bills. The cash ratio of Darden Restaurants also
increase from 0.18 times to 0.66 times means that the liquid assets that Darden Restaurants
have in hand that are enough for backup of short-term liquidation or for payments. Next,
asset management ratio, account receivable turnover increase from 2017 to 2020 which is
from 0.10 times to 1.13 times means that the company have the ability of processing credit.
For average collection period, it shows an upward trend from 2017 to 2019 which is from
3.56 to 3.69, Darden Restaurants requires improved communication with customers about
their debts and the payment expectations. For debt management ratio, the debt ratio of
Darden Restaurant decreases from 2017 to 2019 which is 0.62% to 0.59% means that the
company have lesser debt from bank. For debt-to-equity, it shows a downward trend from
2017 to 2019 which 1.62% to 1.46% which means that they have decreases in having debt.
For profitability ratio, gross profit margin increases from 2017 to 2019 which is 8.81% to
9.78% means they have found a way to lower their cost such as cheaper raw materials.
Besides that, return on equity increase from 2017 to 2019 which is 0.23% to 0.30% because
of high efficiency with which a company's management deploys shareholder capital. Finally,
Market value ratio, the market-to-book ratio increase from 2017 to 2021 which is 5.25 times
to 6.66 times means that the value of the company is high. Hence, Darden Restaurants stock
is expensive. The price earnings ratio decreases from 2017 to 2018 which is 22.84 times to
17.84 means that it does not attract investor to invest because they don’t see the potential of
the company in the future. Hence, they are paying more to receive earnings.

Industry analysis

For the average quick ratio in 2021, it is -1.36 times and for Darden Restaurants in
2021 is 0.90 times and it is above average. This shows a good sign because it has lot of
liquidity assets when there is emergency. For average cash ratio in 2021, it is 1.03 times, and
the company is 0.66 times. It is below average because that the. liquidity assets that Darden
Restaurants have in had is not enough for them in short-term payments. Next, the average
account receivable turnover ratio in 2021 is 17.43 times and for Darden restaurants it is 0.12
times, and it is below average. This shows that Darden Restaurants may don’t have enough
ability of processing credit. For the average collection period in 2021 it is 56.89 times and for
Darden restaurants it is 2.99 times and it is below average. This means that Darden
Restaurants have good communication with customer about their debts and the payment
expectations. Besides that, the average debt ratio for 2021 is 0.85% and the company ratio is
0.74% and it is below average. This means that Darden Restaurants have lesser debt than
other company. For average debt-to-equity in 2021is -1.71% and the company is 2.79%. It is
above average means that Darden Restaurants increasing in the debts. For the average gross
profit margin in 2021 is 10.37% and for Darden Restaurants it is 22.75%. This means that
this company lower their cost for higher profit margin such as using cheaper raw materials.
The average Return on equity in 2021 is -1.45% and Darden Restaurants is 0.22 and it is
above average which means Darden Restaurants have high efficiency with which a
company's management deploys shareholder capital. The average market value ratio is -
4264.54 times, and the company is 6.66 times, and it is above average. This means that
Darden Restaurants have higher value than other company. Finally, for the average price
earnings ratio in 2021 is 2443.98 and Darden Restaurants is 29.65 and is below average. This
is because investor don’t have big expectation of Darden Restaurants in the future.

Conclusion
 Financial statement analysis is important if you want to follow business laws and
rules and meet the needs of stakeholders and other parties. But developing skills and intuition
is just as important as following best accounting practises if you want to do a good job of
analysing financial statements. Analysis of financial statements can help businesses in many
ways. It gives people inside and outside the company the chance to make smart decisions
about investing. Financial statement analysis also gives lending institutions an unbiased look
at the financial health of a business, which helps them decide whether or not to lend money.
And because top executives and other people in management rely on accounting to give them
an accurate picture of how their decisions will affect the business, financial statement
analysis also helps with corporate governance.