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2 pages/≈550 words
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MLA
Subject:
Accounting, Finance, SPSS
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English (U.S.)
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The Executive Summary of Panera Bread Company’s Current Financial Position

Essay Instructions:

Please help me revise this word document I upload. I will give the comment form our professor. Please make sure every single question has be answer. I also will upload the original case and excel help you to work on this paper.
The comment form professor: (Revision is required and determines the final grade for the case. The grade for the initial submission only indicates the quality of current work. For Summary Revision: Shorten 1-3 paragraphs and focus on why Panera needs external financing. The first paragraph should be a brief intro explaining the current state of the firm. There are two financing needs here. 1) The share repurchases. 2) Additional financing needs to support the growth over the next 5 years. The first is not mentioned. Please further discuss list your findings from the forecasting results. What drives the need of external financing in Panera Bread? How much would they need? How sensitive is the external financing need in Panera Bread to the commodity cost, to the sales growth rate, and/or to the payout ratio? Etc. Be more accurate in describing debt options. Such as: Which option is more flexible to the borrower, which has the lowest interest rates, or which have the lowest floating cost? How long is the process of debt issuance? Please elaborate further on the recommendation. What makes the bank loans better than the other options? How to offer flexibility and to adapt the changing financing need in Panera? What is the impact on shareholders?)

Essay Sample Content Preview:

The Executive Summary of Panera Bread Company’s Current Financial Position
October 1st, 2020
Name: Yuwei Bai
Panera Bread Company has grown through relying on retained earnings and minor equity infusions, and external financing will be essential to growing even further during a time of declining margin, increasing commodity costs, and cost uncertainty. Because of a decrease of return on equity, the company is becoming less efficient at creating profits. The gross margin for 2004 and 2006 shows a significant drop, which also means the less efficient management, is in generating profit for every dollar of cost involved. In financial forecasting, there is an assumption that there will be debt financing with no additional equity required to raise capital.
Panera Bread has in the past utilized internal financing to fund growth but now wants to consider the viability of external financing. In 2008 and 2009, it is predicted that sales growth will be 25% and 5% in the period 2010 to 2012. Since there will be lower margins than in the past, and the company needs to grow, then the short-term debt is a good option. There is a likelihood that there will be increased growth, where cash flows will now fund operations, rather than relying on long-term loans.
Panera Bread’s growth is closely linked with unit growth where there is a need for more capital as transaction growth is less likely to result in higher growth like before, and Panera will operate at tighter margins. The share repurchase is one of the value-enhancing initiatives that the managers consider. The $75 million share repurchases will improve the company’s stock value where the returns on equity and assets improve, and show the willingness of the company’s management to increase the sales and margins.
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