After conducting various quantitative analysis and vertical analysis of financial condition of Regal Cinemas, we used the information given in the exhibits to perform our analysis on 10k Income Statements from 2007 to 2013. With the special focus on the percentage changes in sales, cost of goods sold, gross profits, and net earnings.
As shown in the appendices, we have analyzed that the Regal Cinemas will continue to grow its sales with an average rate of 2% in the next few years. On the same side, we have not focused on the advancement and restructuring of the major cinemas since the past few years. Although this may have a negative impact, since the growth rate is almost nil and it can hurt the company in the future. Vertical analysis also shows that the percentage of Cost of Goods Sold is much more than expected so; the company seriously needs to reconsider its costing techniques and other direct and indirect costs. Net Profit margin is yet another big concern for the Regal Cinemas. We suggest that the company should perform some work and restructure its cinemas across the country and try introducing new advanced technologies so that the company would be able to earn more to get back in the trends of profit.
| Year Ended Dec-06, (MM USD) |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
||||||||
| Sales | $ 2,598 |
100% |
$ 2,661 |
100% |
$ 2,772 |
100% |
$ 2,890 |
100% |
$ 2,802 |
100% |
$ 2,676 |
100% |
$ 2,820 |
100% |
$ 3,038 |
100% |
| Cost of Sales | $ 2,004 |
77% |
$ 2,090 |
79% |
$ 2,200 |
79% |
$ 2,314 |
80% |
$ 2,294 |
82% |
$ 2,176 |
81% |
$ 2,222 |
79% |
$ 2,416 |
80% |
| Gross Profit | $ 594 |
23% |
$ 572 |
21% |
$ 572 |
21% |
$ 575 |
20% |
$ 508 |
18% |
$ 500 |
19% |
$ 598 |
21% |
$ 622 |
20% |
| SG&A | $ 66 |
3% |
$ 63 |
2% |
$ 62 |
2% |
$ 64 |
2% |
$ 67 |
2% |
$ 66 |
2% |
$ 69 |
2% |
$ 71 |
2% |
| Other Operating Expense | $ 197 |
8% |
$ 183 |
7% |
$ 202 |
7% |
$ 202 |
7% |
$ 213 |
8% |
$ 198 |
7% |
$ 183 |
6% |
$ 200 |
7% |
| Operating Income | $ 331 |
13% |
$ 325 |
12% |
$ 307 |
11% |
$ 309 |
11% |
$ 228 |
8% |
$ 236 |
9% |
$ 346 |
12% |
$ 351 |
12% |
| Investment Income | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - | ||||||||
| Other Income, net of Other Expense | $ (23) |
-1% |
$ 16 |
1% |
$ 10 |
0% |
$ (5) |
0% |
$ 40 |
1% |
$ (35) |
-1% |
$ 21 |
1% |
$ 55 |
2% |
| Other Income | $ - | $ 16 |
1% |
$ 10 |
0% |
$ - | $ 40 |
1% |
$ - | $ 21 |
1% |
$ 55 |
2% |
|||
| Other Expense | $ (23) |
-1% |
$ - | $ - | $ (5) |
0% |
$ - | $ (35) |
-1% |
$ - | $ - | |||||
| Net Interest Expense (Income) | $ 125 |
5% |
$ 113 |
4% |
$ 124 |
4% |
$ 151 |
5% |
$ 148 |
5% |
$ 150 |
6% |
$ 135 |
5% |
$ 141 |
5% |
| Interest Income | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - | ||||||||
| Interest Expense | $ 125 |
5% |
$ 113 |
4% |
$ 124 |
4% |
$ 151 |
5% |
$ 148 |
5% |
$ 150 |
6% |
$ 135 |
5% |
$ 141 |
5% |
| Minority Interest | $ 0 | $ 1 |
0% |
$ 3 |
0% |
$ (0) |
0% |
$ (0) |
0% |
$ (0) |
0% |
$ (0) |
0% |
$ (0) |
0% |
|
| Pre-Tax Income | $ 183 |
7% |
$ 227 |
9% |
$ 190 |
7% |
$ 153 |
5% |
$ 120 |
4% |
$ 52 |
2% |
$ 232 |
8% |
$ 265 |
9% |
| Tax Expense | $ 58 |
2% |
$ 243 |
9% |
$ 51 |
2% |
$ 62 |
2% |
$ 46 |
2% |
$ 15 |
1% |
$ 90 |
3% |
$ 107 |
4% |
| Unusual Gains, Net of Unusual Losses (after tax) | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - | ||||||||
| Net Income | $ 126 |
5% |
$ (16) |
-1% |
$ 140 |
5% |
$ 91 |
3% |
$ 74 |
3% |
$ 37 |
1% |
$ 142 |
5% |
$ 158 |
5% |
| Preferred Dividends | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - | ||||||||
| Net Income to Common | $ 126 |
5% |
$ (16) |
-1% |
$ 140 |
5% |
$ 91 |
3% |
$ 74 |
3% |
$ 37 |
1% |
$ 142 |
5% |
$ 158 |
5% |
| Common Shares for Primary EPS Calculation |
149.02 |
151.88 |
152.85 |
153.06 |
153.4 |
153.58 |
154.17 |
154.83 |
||||||||
| Earnings Per Share of Common Shareholders | $ 0.842 | $ (0.107) | $ 0.913 | $ 0.596 | $ 0.482 | $ 0.240 | $ 0.923 | $ 1.019 |
....................
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