Exercise D12-5 Cullumber Burgers operates and franchises fast-food restaurants s

Question

Exercise D12-5 Cullumber Burgers operates and franchises fast-food restaurants specializing in grilled hamburgers and chicken sandwiches. The 2015 and 2016 income statements are as follows (in $000s): Year Ended December 31, 2016 December 31, 2015 Total revenues $41,101 $40,513 Expenses Cost of restaurant sales Restaurant operating expenses General and administrative Advertising Depreciation and amortization Impairment of long-lived assets 11,139 16,898 6,837 2,563 2,211 995 40,643 $458 11,068 16,734 5,284 2,660 2,107 0 37,853 $2,660 Total expenses Operating income

Explanation / Answer

Common Size Analysis: 2016 2015 Total revenues 100.00% 100.00% Expenses Cost of retaurant sales 27.10% 27.32% Restaurant opening expense 41.11% 41.31% General and admin 16.63% 13.04% Advertising 6.24% 6.57% Depreciation and Amortization 5.38% 5.20% Impairment of assets 2.42% 0.00% Total expense 98.89% 92.10% Operating income 1.11% 6.47%

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