d and beverage cost were 32.8%, 33% and 34%, in 1999, 1998 and 1997 respectively. In 1999, this cost was 0.2 % less than 1998 and 1.2 % less than 1997. Labor costs accounted for 32.3 % of sales in 1999 and 1998. Other restaurant expenses, such as lease expenses, property taxes, utilities and workers compensation costs, decreased by 14.3% of sales in 1999, compared to 14.7% of sales in 1998 and 15.2% in 1997. Selling, general and administrative expenses decreased 0.5% of sales to 10.4 % in 1999 from 10.9 % in 1998. Profit margin, ROE, and ROA are showing high profitability figures for Darden. Chronologically, Dardens profitability ratios have improved. In 1999, net profit margin increased 31%, from 3.09 to 4.06. Return on equity increased 46%, from 9.97 % to 14.57%. Return on Assets increased 43%, from 5.12 % to 7.37 %.Liquidity RatiosDarden Restaurant, Inc. has a lower current ratio (0.48) than the average of major competitors (0.82). A creditor, particularly a short-term creditor such as a supplier, believes that a higher current ratio is better. For a firm, a high current ratio indicates liquidity, but it also may indicate an inefficient use of cash and other short-term assets. A current ratio of less than 1.0 would mean that net working capital is negative. This is unusual in healthy firms. A lower current ratio may not be a bad sign for a company with a large reserve of untapped borrowing power because various types of transactions affect the current ratio. Darden has a lower quick ratio (0.1) than the competitive average (0.47), which shows that the company may have a substantial portion of its liquidity tied up in slow moving inventory.Activity RatiosDarden's inventory turnover (20.2) is considerably lower than the competitors average. This signifies that Darden is managing inventory inefficiently compared to competitors. Like a low quick ratio, low inventory turnover also shows a large portion of the company's liquidit...
