Annual Report

1
Annual Report

• Wendys International,
  Inc.
• Matt Rosen
• ACG2021 Section 080

2
Executive Summary
Wendys International is a strong company in a
strong market. It has taken its Wendys brand and
expanded into other areas of the restaurant
business. In evaluating the company it is
apparent that it is built to last. They have
placed a great emphasis on their future and
future earning potential. The company has
bettered itself in each of the last 4 years and
has an impressive debt to equity ratio of
35. 2004 Annual Report

3
Introduction

• John T Schuessler, Chairman and CEO
• Home Office Dublin, Ohio
• End of Fiscal Year January 2nd, 2005
• Wendys International owns several restaurant
  brands. The most notable of which is Wendys.
  Wendys is a fast-food chain specializing in
  hamburgers and a chocolate frozen desert called
  the Frosty.
• Wendys International operates restaurants in the
  United States and Canada.

4
Audit Report

• Auditors PricewaterhouseCoopers LLP
  Columbus, Ohio
• The auditor stated that they were not able to
  verify internal control over financial reporting.
  They were however able to verify that to their
  knowledge the information in the financial
  statements is true.

5
Stock Market Information

• Current Price 56.52
• 12 Month Trading Range 23.21
• Dividend Per Share .57
• Current Information as of 2/11/06
• In my opinion I would sell the stock. The stock
  is currently performing very high and it would be
  an optimal time to sell.

6
Industry Situation and Company Plans

• While much emphasis has been placed on nutrition
  and healthy eating, the fast food industry shows
  no signs of slowing down(MarketWatch.) Wendys
  International plans to focus on its Wendys Brand
  in North America and its Tim Hortons brand in
  Canada. Wendys feels that its products are
  strong and looks to focus its future on improving
  financial performance. They have recently hired a
  new director of marketing to help strengthen the
  brand. (Letter to Shareholders, John T.
  Scheussler)

7
Income Statement
Single Step Income Statement Format
8
Balance Sheet
In Evaluating the balance sheets of the past two
fiscal years I noticed that there was not much
disparity between the two. The only difference
that was somewhat noticeable was an increase in
short term liabilities. This did not have much
effect on the overall balance sheet as total
liabilities stayed relatively close.
9
Statement Of Cash Flows

• Cash flows in the past two years are
  significantly greater than Net Income
• The company is growing through several long term
  investments. These include the purchase of
  property and the acquisitions of other brands and
  franchises.
• The company is primarily financed by stock sales.
  It secondary source of financing is long-term
  loans.
• Overall cash has increased over the past two
  years.

10
Accounting Policies

• There are no significant accounting policies
  stated.
• Notes to the financial statements
• Managements Statement of Responsibility for
  Financial Statements
• Internal Control over Financial Reporting
• PricewaterhouseCoopers Report
• Safe Harbor Statement

11
Liquidity Ratios

• Working Capital 2004 2003
  (229,543,000) 412,192,000
• Current Ratio .67
  1.78

12
Profitability Ratios

• Profit Margin 5.1 12.0
• Asset Turnover 1.14
  1.01
• Return on Assets 1.7 8.4
• Return on Equity 2.9 14.9

2004 2003
13
Solvency Ratios

• Debt To Equity 2004 2003
  35
  39
• Wendys International's debt to equity has
  decreased over the past 4 years. This is a good
  sign as is the current debt to equity ratio.

14
Market Strength Ratios

• Price earnings per share 87 19
• Dividend yield 1.2
  .6
• These ratios are not particularly impressive.
  Dividends have increased. This is part of the
  companys future plans. The PE ratio is very
  high, but bodes well for the future stability of
  the company.