Burger King Holdings Inc. was formed in 23 July 2002 and incorporated in Delaware. The holding company restaurant system includes restaurants owned by the company and franchises. The company is the second largest fast food hamburger restaurant chain (BurgerKingHoldingsInc, 2008). Controls set by the company The controls set by the company are to ensure that the financial statements provide reasonable assurance on the reliability of the financial statements and financial reporting.
Internal controls ensure that the financial statements are prepared according to GAAPs. Internal controls ensure correct maintenance of records, transactions are recorded according to GAAPs and the prevention of unauthorized use or disposal of company’s assets. The effectiveness of the internal controls should be reviewed regularly to determine their adequacy although the controls put in place may not prevent and detect misstatements given its limitations due to changing conditions or degree of compliance
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Examples of controls are the security and business controls put in place to prevent access and use of personal information possessed by the company that if leaked, may expose the company to litigations (BurgerKingHoldingsInc, 2008) Financial statements The total revenues for the company have been growing over the years. The total revenue in 2004 was $1. 7 billion rising to $2. 4 billion in 2008. The company’s revenues are generated by franchise and company owned restaurants.
In year 2008, 88% of sales were from franchise restaurants. The operating income and net income over the same period grew from $73 million in 2004 to $ 354 million in 2008 for operating income while net income rose from $ 5 million in 2004 to $ 190 million in 2008 The diluted earnings per share i. e. earnings after adjusting for dilutive effects rose from $106. 1 in 2004 to $ 137. 6 in 2008 Total assets grew from $ 2. 5 billion to $ 2. 6 billion in 2008.
Total stockholders equity also witnessed growth from $ 716 million in 2007 to $ 845 million in 2008 Net cash flows from operating activities grew from $67 million in 2006 to $ 243 million in 2008 Other aspects of the company’s performance is the opening of 202 new restaurants which brings the company’s total number of restaurants to 11,505 as of June, 30 2008 Techniques to analyze financial statements The financial statements are prepared and disclosed according to the GAAPs as well as presented according to the SEC regulations.
The financial statements have been presented based on the reportable segments of the company i. e. USA and Canada EMEA/APAC and Latin America. As seen earlier, the company’s revenues are generated from company’s restaurants and franchise restaurants. The analysis has also been done according to the source of revenue Comparison of restaurant sales from the three reportable segments has been done in the financial statements (BurgerKingHoldingsInc, 2008) Impact
The preparation of the financial statements according to reportable segments helps the company to formulate strategies for the various business segments in line with their performance. Comparison of sales growth in the segments over the years helps the company to evaluate the performance of each source of revenues thus formulate strategies that can improve growth References BurgerKingHoldingsInc. (2008, August 28th). Form 10-k. Retrieved April 10th, 2009, from Burger King Holdings Inc. : http://media. corporate-ir. net/media_files/irol/87/87140/BKC_AR08/10-k. html
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Burger King Holdings Inc.. (2016, Jul 31). Retrieved from https://phdessay.com/burger-king-holdings-inc/
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