Question: Cinemark USA Inc. is one of the largest exhibitors of motion pictures in the United States. The condensed liabilities and stockholders' equity portion of Cinemark's balance sheet for the end of a recent year is as follows (in millions):
Total current liabilities $ 128.9
Long-term debt 687.1
Other items 16.7
Total liabilities $ 832.7
Stockholders' equity (deficit):
Common stock $ 49.5
Additional paid-in capital 51.1
Accumulated other comprehensive loss (77.1)
Retained earnings 169.6
Treasury stock (24.2)
Total stockholders' equity $ 168.9
Total liabilities and stockholders' equity $1,001.6
Additional information:
Total assets, beginning of year: $960.7
Total stockholders' equity, beginning of year: $76.8
Cinemark's income statement for a recent year-end was as follows:
Revenues:
Admissions $ 647.0
Concession 321.6
Other 55.6
Total revenues $1,024.2
Costs and expenses:
Cost of operations:
Film rentals and advertising $ 348.8
Concession supplies 53.8
Salaries and wages 103.1
Facility lease expense $ 126.6
Utilities and other 113.0
Total cost of operations $ 745.30
General and administrative expenses 51.5
Depreciation and amortization 67.1
Other expenses 38.5
Total costs and expenses $ 902.4
Operating income $ 121.8
Other income (expense) Interest expense $ 42.7
Other expense 7.6
Income before income taxes $ 71.5
Income taxes 27.0
Net income $ 44.5
1. Determine the following:
a. DuPont formula
b. Leverage formula
c. Total operating profit as a percent of sales
d. Concession gross profit as a percent of concession sales
e. Number of times interest charges earned
2. Evaluate Cinemark's financial performance, using the calculations in (1).