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MANAGING the FUTUREDARDEN RESTAURANTS INC

997) 1.66(1998) 1.81(1999). This ratio shows how efficiently Darden Restaurant Inc. operates. If this ratio is higher, the company is more efficient in managing its assets. The financial leverage ratio (equity multiplier) has been slightly decreasing: 1.71 (1996) 2.63 (1997)1.88 (1998)1.96 (1999). Long -term or short-term obligations can be recognized by this ratio. If this ratio is higher the company is more risky. Darden is moving toward being more stable.Overall, return on equity has been increasing: 6.09%(1996) -8.42%(1997) 9.97%(1998) 14.57%(1999), which means high profitability per equity. Darden Restaurants, Inc. profitability, asset utilization, and solvency/leverage are in good condition. KEY FINANCIAL RATIOSTable 1: 12 Key Ratios for Darden vs. its 7 Major Competitors*All dollar amounts in millionsAdvanticaApplebeeBrinkerLandry'sLone starIl fornaioOutbackAverage of 7Darden Profitability RatiosNet Profit Margin-23.39%9.62%5.45%3.79%0.62%2.84%7.70%0.95%4.06%Return on EquityN/A22.00%16.50%4.60%0.80%7.10%17.90%11.48%14.57%Return on Assets-32.30%13.80%10.30%3.30%0.70%4.70%15.20%2.24%7.37% Activity RatiosInventory Turnover88.643.394.919.83635.8132.564.4119.92Fixed Asset Turnover2.552.132.31.021.361.922.712.002.35Total Asset Turnover100.71.41.90.91.11.82.215.711.81Receivables Turnover73.2737.3115.236.7N/A75.2146.880.745170.35 Liquidity RatiosCurrent Ratio0.520.640.460.980.990.81.380.820.35Quick Ratio0.30.30.10.40.50.51.20.470.19 Leverage RatiosDebt to total assets1.090.430.390.240.090.350.180.400.49Time Interest Earned-1.049.3116.7610.440005.0711.64Fixed charge coverage-1.3256.8811.561.4100142.9330.2110.66Table 2: Dardens 12 Key Ratios Over Time*All dollar amounts in millions1999199819971996 Profitability RatiosNet Profit Margin4.06%3.09%-2.87%2.33%Return on Equity14.57%9.97%-8.42%6.09%Return on Assets7.37%5.12%-4.63%3.56% Activity RatiosInventory Turnover19.9215.1020.5221.60Fixed Asset TurnoverTotal Asset Turnover1.811.661...

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