# Analysis of the Company Yum! Brands, Inc.

In the module strategic hospitality management an analysis of the company YUM! Brands, Inc. will be made. The second week of the module especially focuses on the internal analysis of YUM!. In order to understand the internal analysis process, books are red on the topic. This will be done in order to define the strengths and weaknesses, resources, capabilities and the development of competitive and strategic advantages. The lectures and workshops provided important information and contributed to the learning outcomes of this week. These outcomes together will be related to YUM!.

The internal environment will be analysed by discovering the vision, mission goals and strategies of YUM!. These aspects together will be

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Those ratios are the current, solvency, debt equity, profit margin and the working capital turnover and the outcome of the ratios are in million dollars.

Ratios

The liquidity of YUM can be calculated by the current assets divided by the current liabilities and can be used to determine YUM’s ability to pay of its short term obligations. How higher the current ratio, the larger the margin of safety is to cover its short term debts. The liquidity of YUM is increasing in three year from $0.55 in 2008 to $0.94 in 2010. This increasing of 70.9% means that for every dollar of current liabilities the YUM has $0.94 dollar of current assets.

The solvency ratio is measuring YUM’s ability to meet its long term obligations and can be calculated by dividing the total assets by the total liabilities. Furthermore, this ratio explains whether YUM owns more than it’s owes. The higher the solvency is, the more solvent the YUM Brand Corporation is. The solvency of the corporation in 2008 is $0.99 and in 2010 $1.23. This means that YUM has $1.23 of total assets for each dollar of total liabilities. After paying all the creditors the YUM Brand Corporation has $0.23 (18.7%) for other purposes.

The debt equity ratio tells how the YUM Brand Corporation relies on debt to finance its assets. This can be done by dividing the total liabilities by the total owner’s equity. In 2008 the debt equity is -70.4. This figure is negative, because of the negative amount