Focus on Analysis | Yum! Brands, Inc.

(Learning Objective 4: Analyze f inancial statements) Refer to the Yum! Brands, Inc.'s financial statements in Appendix B at the end of the book. Suppose you are an investor considering buying Yum! Brands, Inc.'s common stock. The following questions are important. Show amounts in millions.

1. Which was larger for Yum! Brands, Inc. during 2012: (1) sales revenue, or (2) cash collected from customers? Why? Show computation. (Challenge)

2. Investors are vitally interested in a company's sales and profits and its trends of sales and profits over time. Consider Yum! Brands, Inc.'s sales and net income (net loss) during the period from 2010 through 2012. Compute the percentage increase or decrease in net sales and also in net income (net loss) from 2010 to 2012. Which item grew faster during this two-year period-net sales or net income (net loss)? Can you offer a possible explanation for these changes? (Challenge)