Compare the financial situations of two companies.

Introduction This report is to compare the financial situations of two companies in the restaurant industry, Darden Restaurants Inc. of Florida and Brinker International Inc. of Texas. The report will provide a detailed analysis and summary of several things including financial analysis, industry history and analysis, both companies history and analysis, vertical and horizontal analysis, and the creditworthiness of each company. These analysis that we are going to conduct will provide us with a myriad of information about the two companies and how they compare to each other. In comparing the companies to each other it is important to take into account the liquidity or ability of a firm to meet its current obligations, and solvency†¦show more content†¦New York: Irwin/McGraw-Hill, Inc., 1999.) Liquidity Analysis of Darden Restaurants Inc. Current Ratio = 0.48 In the year 2000 the current assets of Darden equaled $290,500,000 while the current liabilities equaled $606,900,000. Quick Ratio = 0.1 In the year 2000 Darden had monetary current assets of $60,000,000 while current liabilities was $606,900,000. Liquidity Analysis of Brinker International Inc. Current Ratio = 0.57 In the year 2000 the current assets of Brinker Internaional equaled $131,700,000 while current liabilities equaled $231,000,000. Quick Ratio = 0.20 In the year 2000 Brinker International had monetary current assets of $46,700,000 while current liabilities equaled $231,000,000. Liquidity Analysis of the Restaurant Industry The industry average current ratio for the year 2000 was 0.6, while for the quick ratio it equaled 0.3. These numbers come out to be lower than what is considered average for a normal manufacturing company in which a satisfactory current ratio is 2.0 while a good quick ratio is considered 1.5. However according to my research on the industry those numbers seem to be the norm. 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