Financial Statements Paper Part II
University of Phoenix
Advanced Topics in Accounting Research
As a publicly traded company for ten years, Landry’s has grown into a thriving restaurant chain. With numerous restaurants under well known names such as Rainforest Café, Joe’s Crab Shack, and Landry’s Seafood House, the corporation has produced very enticing financial statements for investors and management. Financial statements are very important tools that businesses and investors utilize to base current and future decisions. Income statements reveal whether the company is profitable and shows how revenues are calculated into net income. The balance sheet gives an overall picture of a company’s financial status though the classification of assets, liabilities, and stockholder’s equity. The statement of cash flows shows how the cash moves in and out of the business and the classification of transactions into operating, investing, and financing activities. In review of Landry’s 2003 financial statements we have a clear view of the company’s financial status and can predict possible managerial decisions. Although financial statements cannot be the sole basis for managerial decisions, they are generally the primary source. The purpose of this paper is to discuss managements assumptions of Landry’s financial condition, identify weaknesses, and recommend a course of action to correct any concerns.
A brief history of Landry’s as discussed in the 2003 highlights tells us that the corporation consists of numerous restaurants operating under various names nationwide. The success of the restaurant chains enabled Landry’s to open an aquarium in downtown Houston, Texas. Landry’s boasts an 1100 percent increase to net income over the past ten years while maintaining a manageable level of debt. In 2003 the corporation operated 286 restaurants and made acquisitions that approximated $27 million dollars which includes future commitments....