c


 



Ans. Boston Chicken is performing well in the market. This we can analyse by comparing the
performance of the company in past 2 years i.e. 1993 &1994. We can compare their profitability
& return ratios. Calculation of ratios:

—Ê  
  

articulars 1993 1994
Revenues 42530 96151

EBT 647 20450

EBT/Revenues 1.5% 21.2%
Tax Rate 0% 20.9%
(4277/20450)
EAT 647 16173
EAT/Revenues 1.5% 16.82%
2


0 5097

 




EBT 647 25547
Less tax 0 20.9%
EAT 647 20207
EAT/Revenues 1.5% 21%

The above table shows that company¶s after tax profitability increases in 1994 from
O
O 
—Ê 2
 
 
If provision made for relocation is added back to profit for
1994, % margin will increase up O This relocation was done for shifting the
company¶s headquarter.
—Ê ·!"  There is increase in leverage because convertible debentures were
introduced in 1994.This is a sign of thinking for the investors.
Î  2 
#$ 

%  

art 1993 1994

EAT 647 16173
Equity 94906 259815
Î Î

 2 O
&
Î 

   
Assets 110064 426983
Î2 0.59% 3.79%

Above table shows that there is an increase in both Î2$Î from the previous year. This
shows that company is doing well.