Mid Term Report Submitted Towards The Partial Fulfilment OF Under

Graduate Degree IN BBA(General)

FINANCIAL MANAGEMENT

Cash Management Procedure of Fast-Food Industry

Submitted to: Submitted by:

Mrs Pooja Agarwal Saransh C-63

Megha C- 29
Pushpender C- 40
Navdeep C- 34
Prachi C- 38

AMITY SCHOOL OF BUSINESS, NOIDA

AMITY UNIVERSITY- UTTAR PRADESH
 CERTIFICATE

THIS IS TO CERTIFY THAT THE PROJECT WORK DONE ON

FINANCIAL MANAGEMENT – CASH MANAGEMENT ,BY
STUDENTS{SARANSH, MEGHA, PUSHPENDER, NAVDEEP,
PRACHI, AKANKSHA} OF ASB,HAS BEEN REPORTEDLY
COMPLETED WITH LOT OF INVOLVEMENT & DELIGENCE UNDER
OUR ACADEMIC GUIDANCE & SUPERVISION

Mrs.PUJA AGARWAL,
FACULTY,
ASB, AU ,NOIDA
 ACKNOWLEDGEMENT
We would like to take this opportunity to thanks various people
who have given me their invaluable help.Without their constant
help and support this project could not have been completed.
First and foremost I would like to express my gratitude to our
project guide Mrs.pooja Aggarwal-financial management lecturer.

In last we would like to thanks our colleagues for extending their

faith us.

Thanking you.
 INTRODUCTION

Cash Management Basics

Cash is the business's lifeblood. It is one of your most important assets and should be
managed efficiently to support your growth and financial strength.Managed well, the
company remains healthy and strong. Managed poorly, the company goes into cardiac
arrest.

Cash Management determines business's short-term stability and its long-term survival.

Cash management is concerned with managing of:

• Cash flows into and out of the firm

• Cash flows within the firm
• Cash balances held by the firm at a point of time by financing deficit or investing
surplus cash.

Cash is the most liquid asset which maintains the solvency of business.Firm should
evolve strategies regarding the following four facets of cash management:

• Cash Planning – Cash inflows and outflows should be planned to project cash
surplus or deficit for each period of the planning period. Cash budget shoulh be
prepared for this purpose.
• Managing the cash flows – The flow of cash should be properly managed. The
cash inflow should be accelerated while, as far as possible, the cash outflows
should be decelerated.
• Optimum cash level – The firm should decide about the appropriate level of cash
balances. The cost of excess cash and danger of cash deficiency should be
matched to determine the optimum level of cash balance.
• Investing surplus cash – The surplus cash balances should be properly invested
to earn profit. The firm should decide about the division of such cash balance
between alternative short term investment opportunities such as bank deposits,
marketable securities, or inter-corporate lending.

The ideal cash management system will depend on firm’s products, organization
structure, competition, culture and options available.

Constant pressure to increase return on assets has firms seeking ways to reduce their
working capital costs. In the cash management area, firms are employing more
sophisticated collection and disbursement systems. Cash management systems today
efficiently speed up collections and, at the end of the day, sweep excess balances into
money market accounts. Cash managers focus on finding the optimal cash-short-term
investment mix.
We can view cash as a raw material. Accordingly, the cash manager and the production
manager face similar challenges. The production manager is responsible for maintaining
appropriate levels of raw materials, work-in progress, and inventories. Similarly, the cash
manager is responsible for maintaining optimal cash balances.
Maintaining appropriate cash balances or inventory levels involves managing flows. As
long as the cash manager has sources of credit (access to cash), the firm can cover
operating costs while maintaining minimal cash balances. Likewise, the production
manager who is able to purchase materials on an as needed basis can minimize the firm’s
inventory levels.
Inefficient use of cash and materials ultimately reduces the firm’s profitability.
Inadequate levels of cash can preclude a firm from meeting its financial obligations as
they become due, while material shortages can prevent meeting production schedules.
Excess levels of cash and inventories tie up capital and reduce the firm’s return on
assets.

Business Cash Cycle

Receivables Management

LOCKBOX SERVICE
Lockbox processing is one of the core products of an effective cash management system.
Lockbox Service expedites the receipt, processing and collection of your incoming
payments. Unique zip codes, around the clock mail pick-up, state-of-the-art processing
and aggressive check availability are key to LockBox successful service delivery.
Additional features include funds concentration, reporting of deposited funds and
imaging of check items.

Need of Lockbox Service if the company:

• maintains billings of $1 million per month or receives over 150 payments a
month by mail
• receives high dollar payments each month
• receives more than 150 remittances each month
• needs to separate the deposit and receivables posting functions for audit purposes
• has receivables that are collected from across the country

� Paper-based collection: payment by cheque is the traditional way of investing in

mutual funds by retail investors in many countries. This payment method is convenient
and is suited to clearing and settlement systems. Cheques are used in most countries in
the region, including India, Australia, Singapore, Hong Kong and Malaysia.
� Electronic funds transfer (EFT): this payment method, particularly relevant to
investment in mutual funds, has taken off in some countries largely due to the active role
played by brokers (including banks that act as brokers) and the electronic banking
facilities that are available. EFT is also popular with third-party portals offering similar
services with tie-ups with banks and payment gateways.

� Automatic investment programmes: these are widely used by money market

mutual funds to attract corporate investors. At a basic level, these programmes are
accounts linked for investment and withdrawal. The asset manager teams up with a cash
management bank to deliver this product to customers. Clients are increasingly choosing
automatic investment programmes, which bring them the benefits of convenience and
peace of mind, and asset managers are increasingly promoting such programmes to
reduce their costs and improve their liquidity position.

Ultimately, the asset manager’s goal is to enhance the reach of the investor base, which
means offering varied options for investors to make investments, whether paper-based,
electronic or any other means. While this is achieved by engaging cash management
banks for collection, the asset manager also needs to optimise the cost of collection and
servicing such clients, as well as encourage them to move to electronic options. Here
again, cash management banks play a significant role for the asset manager in offering e-
cash management products.

Cash Management Needs

Cash Disbursement

CONTROLLED DISBURSEMENT SERVICE

It is to optimize the use of all account balances and maintain maximum control over your
daily cash position. When we use our Controlled Disbursement Service we will be
provided with the total of the disbursement items that will be charged to your account by
10:00 a.m. CT each day. This information allows us to fund your accounts every day,
eliminating the need to leave idle funds sitting in your account.

Need Controlled Disbursement if the company:

• has high volume disbursement accounts of over 300 checks a month
• has clearings in excess of $750,000 each month
• wants to increase daily dollar investments to maximize return
• wants to minimize borrowing
• has payables that are nationwide
It is important for an company to make timely payments if it is to maintain its credibility
and the confidence of investors. Various factors are driving managers to look for holistic
global payment solutions:

� growth in volumes;
� multiple domestic and cross-border operations;
� product complexity;
� the challenge of a manual payments environment, often with proprietary bank
software; and
� the migration to a straight-through processing (STP) environment with the goal of
reducing costs and enhancing customer service.

Managers today are looking for an integrated global payments solution that is
comprehensive and web-enabled, with the following features:

� electronic payments processing with support for multiple systems and multi-currency
handling;
� balance management;
� reconciliation;
� regulatory compliance; and
� position management and forecasting.

Liquidity Management

Asset management is one of the more demanding industries in terms of the requirement
for creating sophisticated cash management solutions. One of the key asset management
functions is to ensure that the amount of cash that is not invested is minimal (ideally,
close to zero). This puts a tremendous focus on liquidity management. Cash management
banks thus need to provide real-time activity updates on accounts, and provide options for
investing any surplus funds. Banks should also provide overnight deposit sweep facilities
for balances that remain in the accounts. Overnight deposit facilities are regulated by the
central bank in most countries: in Malaysia, Australia, Japan and China, for instance,
such deposit sweep facilities are available, although they are not yet available in India
and Singapore.
Information Management

Although many cash management banks are focusing on information management, asset
managers and
their clients have very particular information needs. The asset management business is
almost an extension
of a bank, and asset managers similarly need sophisticated, real-time information on their
collections
and payments in order to make investment decisions. A cash management bank should
provide a link to
obtain information with respect to both the asset manager and its clients in areas such as:
� collections;
� automatic reinvestment;
� electronic payment of dividends and interest;
� withdrawals and termination credits, etc.;
� monthly report on charges;
� outstanding collections and payments reports; and
� reconciliation.
 Focus on

Cash Management Procedure

Of

Fast Food Industry

 KFC
KFC HISTORY-AT-A-GLANCE

In 1930 In the midst of the depression, Harland Sanders opens his first restaurant
in the small front room of a gas station in Corbin, Kentucky.
Sanders serves as station operator, chief cook and cashier and names the dining
area "Sanders Court & Café." In 1936 Kentucky Governor Ruby Laffoon makes
Harland Sanders an honorary Kentucky Colonel in recognition of his contributions to
the state's cuisine. In 1937The Sanders Court & Café adds a motel and expands the
restaurant to 142 seats. In 1939 The Sanders Court & Café is first listed in Duncan
Hines' "Adventures in Good Eating.” The pressure cooker is introduced. Soon
thereafter Colonel Sanders begins using it to fry his chicken to give customers fresh
chicken, faster. In 1940 Birth date of the Original Recipe. In 1952 The Colonel
begins actively franchising his chicken business by traveling from town to town and
cooking batches of chicken for restaurant owners and employees. The Colonel
awards Pete Harman of Salt Lake City with the first KFC franchise. A handshake
agreement stipulates a payment of a nickel to Sanders for each chicken sold. In
1955 An interstate highway is built to bypass Corbin, Kentucky. Sanders sells the
service station on the same day that he receives his first social security check for
$105. After paying debts owed, he is virtually broke. He decides to go on the road to
sell his Secret Recipe to restaurants. In 1957 Kentucky Fried Chicken first sold in
buckets. In 1960 The Colonel's hard work on the road begins to pay off and there
are 190 KFC franchisees and 400 franchise units in the U.S. and Canada. In 1964
Kentucky Fried Chicken has more than 600 franchised outlets in the United States,
Canada and the first overseas outlet, in England. Sanders sells his interest in the
U.S. company for $2 million to a group of investors headed by John Y. Brown Jr.,
future governor of Kentucky. The Colonel remains a public spokesman for the
company. In 1965 Colonel Sanders receives the Horatio Alger Award from the
American Schools and Colleges Association. In 1966The Kentucky Fried Chicken
Corporation goes public. In 1969 The Kentucky Fried Chicken Corporation is listed
on the New York Stock Exchange. In 1971 More than 3,500 franchised and
company-owned restaurants are in worldwide operation when Heublein Inc. acquires
KFC Corporation. In 1976 An independent survey ranks the Colonel as the world's
second most recognizable celebrity. In 1979 KFC cooks up 2.7 billion pieces of
chicken. There are approximately 6,000 KFC restaurants worldwide with sales of
more than $2 billion. In 12/16/1980 Colonel Harland Sanders, who came to
symbolize quality in the food industry, dies after being stricken with leukemia.
In 1982 Kentucky Fried Chicken becomes a subsidiary of R.J. Reynolds Industries,
Inc. (now RJR Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds.
In 1986 PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc. In 1997 PepsiCo, Inc.
announces the spin-off of its quick service restaurants - KFC, Taco Bell and Pizza Hut
- into Tricon Global Restaurants, Inc. In 2002 Tricon Global Restaurants, Inc., the
world's largest restaurant company, changes its corporate name to YUM! Brands,
Inc. In addition to KFC, the company owns A&W® All-American Food® Restaurants,
Long John Silvers®, Pizza Hut® and Taco Bell® restaurants.
In 2006 More than a billion of the Colonel's "finger lickin' good" chicken dinners are
served annually in more than 80 countries and territories around the world.
CASH MANAGEMENT- Report

They receive an impressed amount of Rs. 50,000 from the head office on a monthly basis.
Out of which 10,500 goes in as float which is the initial amount. And the petty cash
amount is 39,500. An amount of Rs.1500 is separated from the float amount.
The petty cash amount is used for buying raw materials (vegetables). But all the base
materials including chicken and spices are on credit basis. Spices come from
“VENKY’S” and chicken from a Punjabi store. The payment for all of this comes in the
form of a cheque from the head office.

Average Sale figures

AVERAGE U.S. SALES PER SYSTEM

PERFORMANCE
2006 marked another stellar year for KFCH. KFC produced some very tangible results
amidst a challenging operating environment. For the year under review, KFCH garnered
a profit before taxation (PBT) of RM142.3 million on the back of a revenue of
RM1,523.8 million, against 2005’s PBT of RM5.6 million and revenue of RM1,456.5
million. In the KFC Restaurants segment (covering KFC Malaysia, Singapore and
Brunei), operating profit rose by 19.5% from RM102.6 million in 2005 to RM122.6
million, while revenue grew by 8.4% from RM1,073.4 million in 2005 to RM1,164.1
million. The improved performance came about as a result of the successful execution of
a number of key initiatives which included a strategy of continuing restaurant expansion
and the implementation of effective KFC branding and marketing programmes. This
strategy proved invaluable in helping negate the adverse effects of the Avian Flu in early
2006. The year also saw significant improvements in profitability following
rationalisation measures and rising throughput as the Board and Management focused on
product innovation, improved access to market segments, effective cost control, better
performance and effective asset and liability management as well as prudant treasury
operations.
BOOKS OF ACCOUNT:
In this case only a cash register is maintained apart from a ledger keeping details of raw
materials bought.

RECORDING OF SALES AND REVENUE

• The sales are recorded on a daily basis and sent over to the Head Office.

Effective Asset Management

The Board and Management are committed to effective asset and liability management
and prudent treasury operations. Over the course of 2006, surplus cash flows generated
from operations and asset sales were redirected towards investments in income-
generating assets to reduce KFCH’s borrowings. This resulted in a reduction of
borrowings from RM280.4 million at the start of 2006 to RM200.4 million at the end
of 2006. Consequently, KFCH’s gearing (net of cash and bank balances) has been
reduced by 77.0% from 0.31 times in 2005 to 0.07 times as at end December 2006. The
positive financial effects of these measures is most evident in the almost 33.0% reduction
in our finance cost to RM15.0 million from RM22.2 million previously.

Focused Growth
The strategic initiatives outlined in KFCH’s Strategic Business Plan 2007 – 2009 (as
endorsed by the Board), continue to serve as a framework for Management to continue
our forward momentum in increasing shareholder value. These strategies aim to enhance
KFCH’s competitive advantage, grow our profitability and transform us into a
fundamentally strong company. Over the next three years, we intend to grow our EPS by
more than 10.0% annually and deliver a minimum 25.0% dividend payout. By turning
around our companies into inherently profitable and cash generative entities, KFCH will
be closer to achieving leadership status in terms of value creation, governance and
operation.
 Income Statements
For the year ended 31st December 2006
Balance Sheet
As at 31st December 2006
Cash Flow Statement
For the year ended 31st December 2006
STAFF AND SALARY
• There are 25 employees at this particular branch of KFC.
• Their remuneration is on a monthly basis which comes in the form of cheques
from the head office after the branch mails the report of manpower employed
• At rush hour times maximum employees are present.
• As an incentive one time meal at KFC is provided to the employees.

Employee Benefits
(i) Short Term Benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in
the year in which the associated services are rendered by employees. Short term
accumulating compensated absences such as paid annual leave are recognised when
services are rendered by employees that increase their entitlement to future compensated
absences, and short term non-accumulating compensated absences such as sick leave are
recognised when the absences occur.

(ii) Defined Contribution Plans

Defined contribution plans are post-employment benefit plans under which the Group
pays fixed contributions into separate entities or funds and will have no legal or
constructive obligation to pay further contributions if any of the funds do not hold
sufficient assets to pay all employee benefits relating to employee services in the current
and preceding financial years. Such contributions are recognised as an expense in the
profit or loss as incurred. As required by law, companies in Malaysia make such
contributions to the Employees Provident Fund (“EPF”). Some of the Group’s foreign
subsidiaries also make contributions to their respective countries’ statutory pension
schemes.

(iii) Defined Benefit Plans

The Company and certain subsidiaries operate an unfunded, defined benefit Retirement
Benefit Scheme (“the Scheme”) for its eligible employees. Their obligation under the
Scheme, calculated using Projected Unit Credit Method, is determined based on actuarial
computations by independent actuary, through which the amount of benefit that
employees have earned in return for their service in the current and prior years is
estimated. That benefit is discounted in order to determine its present value. Actuarial
gains and losses are recognised as income or expense over the expected average
remaining working lives of the participating employees when the cumulative
unrecognised actuarial gains or losses for the Scheme exceed 10% of the higher of the
present value of the defined benefit obligation and the fair value of plan assets. Past
service costs are recognised immediately to the extent that the benefits are already vested,
and otherwise are amortised on a straight-line basis over the average period until the
amended benefits become vested. The amount recognised in the balance sheet represents
the present value of the defined benefit obligations adjusted for
unrecognised actuarial gains and losses and unrecognised past service costs, and reduced
by the fair value of plan assets.
Any asset resulting from this calculation is limited to the net total of any unrecognised
actuarial losses and past service costs, and the present value of any economic benefits in
the form of refunds or reductions in future contributions to the plan.

(iv) Termination Benefits

Termination benefits are payable when employment is terminate before the normal
retirement date or whenever an employee accepts voluntary redundancy in exchange for
these benefits. The Group recognises termination benefits as a liability and an expense
when it is demonstrably committed to either terminate the employment of current
employees according to a detailed plan without possibility of withdrawal or providing
termination benefits as a result of an offer made to encourage voluntary redundancy. In
the case of an offer made to encourage voluntary redundancy, the measurement of
termination benefits is based on the number of employees expected to accept the offer.
Benefits falling due more than twelve months after balance sheet date are discounted to
present value.

SHORTAGES AND CONTINGENCIES

• In case of shortage of cash it comes from the pocket of the manager, which he can
claim later.
• In case of shortage of stock they usually borrow from other KFC’s in the
surrounding areas. And if they are still not able to get the chicken they then
approach the market.

SURPLUS
• If they exceed their target they have to inform the Head Office and then they
accordingly get bonus

WASTAGES
• There’s a money back policy for customers who are not satisfied with their order.
• This is recorded as “Void” or “Discounts” and a report is sent to the Head Office.
 McDonald’s
A BRIEF HISTORY
In early 1954 Ray Kroc drove to San Bernadino, CA to see what all the fuss was with a
hamburger stand owned by Dick and Maurice (Mac) McDonald. Kroc, who sold
Multimixers, wanted to know what the brothers were doing that they ordered so dang
many of the things.

What Kroc discovered was a huge lunch line of ordinary people wanting a 15¢ burger (4¢
extra for cheese), a 5¢ coffee - and a third of them, a 20¢ milkshake! And all these people
being served at a speedy 15 sec. apiece. You know, fast food!

The McDonald brothers had done for hamburgers what Henry Ford had done for cars.
Inside the small restaurant, 3 grillmen did nothing but flip burgers, while 2 guys did
milkshakes and another 2 did french fries. Throw in some countermen and a packager
and you have mass production!
Their concept came at exactly the right time. America was booming as families moved to
surburbia. McDonalds provided a cheap, easy dinner. And right from the start,
McDonalds was kid friendly.

The brothers were getting attention and had already issued nine franchises. Surprised
them when folks wanted to call these new restaurants, McDonalds.

Now, the Dick and Mac McDonald were men with priorities. They made a good living,
had nice homes and cars, and didn't want to be on the road, sleeping in motels, while
selling more franchises.

Not so for Ray Kroc. His vision was as limitless as his willingness to work. He persuaded
the brothers to let him be franchise agent.

He opened his own first hamburger stand in suburban Chicago in 1955. But the money,
as we all now know, was in franchises. Slowly, he grew. By 1956 there were 12, by 1960,
228. In the year 2000, McDonalds had grown to 25,000 restaurants in about 120
countries.

In 1961 Kroc bought out the McDonald brothers, whom he had come to see as lazy and
unambitious. The brothers wanted, for the name and the company, $2.7 million, which
was a million each after taxes. A huge amount for Kroc back then, but in retrospect, a
great deal. Years later, Dick McDonald when asked if he had any regrets said, "I would
have wound up in some skyscraper somewhere with about four ulcers and eight tax
attorneys trying to figure out how to pay all my income tax."
CASH MANAGEMENT- Report

They receive an impressed amount of Rs. 80,000 from the head office on a monthly basis.
Out of which 17,500 goes in as float which is the initial amount. And the petty cash
amount is 54,500. An amount of Rs.1500 is separated from the float amount.
The petty cash amount is used for buying raw materials (vegetables). But all the base
materials including bread and vegetables are on credit basis. The payment for all of this
comes in the form of a cheque from the head office

The McDonald's Corporation reported that its net income rose 8.8 percent in the fourth
quarter, to a record $186.2 million, and was up 10.4 percent for all of 1990, to $802.3
million, also a record. McDonald's latest results compared with fourth-quarter income in
1989 of $171.1 million and full-year income of $726.7 million. Revenues for the fourth
quarter were $1.73 billion, up from $1.58 billion a year ago; revenues for the year were
$6.78 billion, compared with $6.14 billion in 1989. Earnings per share jumped to 51 cents
from 46 cents, for the quarter, and for the full year rose to $2.20 a share, from $1.95.

PERFORMANCE

During 2006, the Company disposed of its entire investment in Chipotle Mexican Grill
(Chipotle) via public stock offerings and a tax-free exchange for McDonald's common
stock. As a result of the complete disposition of Chipotle, the Company has reflected
Chipotle's results for all years shown as discontinued operations, including gains from the
disposition in 2006.

In analyzing business trends, management considers a variety of performance and

financial measures including comparable sales growth, Systemwide sales growth,
operating margins and returns.

• Constant currency results exclude the effects of foreign currency translation and are
calculated by translating current year results at prior year average exchange rates.
Management reviews and analyzes business results in constant currencies and bases
certain compensation plans on these results because we believe they better represent the
underlying business trends.

• Comparable sales are a key performance indicator used within the retail industry and
are indicative of acceptance of the Company's initiatives as well as local economic and
consumer trends. Increases or decreases in comparable sales represent the percent change
in constant currency sales from the same period in the prior year for all McDonald's
restaurants in operation at least thirteen months, including those temporarily closed.
Some of the reasons restaurants may be temporarily closed include road construction,
reimaging or remodeling, and natural disasters. McDonald's reports on a calendar basis
and therefore the comparability of the same month, quarter and year with the
corresponding period of the prior year will be impacted by the mix of days. The number
of weekdays, weekend days and timing of holidays in a given timeframe can have a
positive or negative impact on comparable sales. The Company refers to this impact as
the calendar shift/trading day adjustment. This impact varies geographically due to
consumer spending patterns and has the greatest impact on monthly comparable sales.
Typically, the annual impact is minimal, with the exception of leap years.

• Systemwide sales include sales at all McDonald's and Boston Market restaurants,
whether operated by the Company, by franchisees or by affiliates. While sales by
franchisees and affiliates are not recorded as revenues by the Company, management
believes the information is important in understanding the Company's financial
performance because it is the basis on which the Company calculates and records
franchised and affiliated revenues and is indicative of the financial health of our
franchisee base.

• Return on incremental invested capital (ROIIC) is a measure reviewed by management

over one-year and three-year time periods to evaluate the overall profitability of the
business units, the effectiveness of capital deployed and the future allocation of capital.
The return is calculated by dividing the change in operating income plus depreciation and
amortization (numerator) by the adjusted cash used for investing activities (denominator),
primarily capital expenditures. The calculation assumes a constant average foreign
exchange rate over the periods included in the calculation.

BOOKS OF ACCOUNT:
In this case a Cash book is prepared along with the cash register and also a ledger for
maintaining record of things bought on cash and credit.

RECORDING OF SALES AND REVENUE

• The sales are recorded on a weekly basis and sent to the HO. Thereon the details
go on over to the Main McDonald’s office in America.
Focused Growth
The strategic initiatives outlined in McDonald’s Strategic Business Plan 2007 – 2009 (as
endorsed by the Board), continue to serve as a framework for Management to continue
our forward momentum in increasing shareholder value. These strategies aim to enhance
McDonald’s competitive advantage, grow our profitability and transform us into a
fundamentally strong company. Over the next three years, we intend to grow our EPS by
more than 10.0% annually and deliver a minimum 25.0% dividend payout. By turning
around our companies into inherently profitable and cash generative entities, McDonald
will be closer to achieving leadership status in terms of value creation, governance and
operation.
 Income Statements

Financial data in U.S. Dollars

Values in Millions (Except for per share items)
2006 2005 2004 2003 2002
Period End Date 12/31/200612/31/200512/31/200412/31/200312/31/2002
Period Length 12 Months 12 Months 12 Months 12 Months 12 Months
Stmt Source 10-K 10-K 10-K 10-K 10-K
Stmt Source Date 02/26/200702/26/200702/26/200703/05/200403/12/2003
Stmt Update Type Updated Restated Restated Updated Updated

Revenue 21,586.4 19,832.5 18,594.0 17,140.5 15,405.7

Total Revenue 21,586.4 19,832.5 18,594.0 17,140.5 15,405.7

Cost of Revenue, Total 14,602.1 13,596.0 12,690.6 11,943.7 10,746.7

Gross Profit 6,984.3 6,236.5 5,903.4 5,196.8 4,659.0

Selling/General/Administrative
2,337.9 2,167.1 1,939.1 1,833.0 1,809.0
Expenses, Total
Research & Development 0.0 0.0 0.0 0.0 0.0
Depreciation/Amortization 0.0 0.0 0.0 0.0 0.0
Interest Expense (Income), Net
-76.8 -52.8 -60.0 -36.9 -24.1
Operating
Unusual Expense (Income) 316.4 174.4 531.4 419.0 874.8
Other Operating Expenses, Total -38.3 -44.7 -45.0 160.5 -113.6
Operating Income 4,445.1 3,992.5 3,537.9 2,821.2 2,112.9

Interest Income (Expense), Net

-402.0 -356.1 -358.4 -388.0 -374.1
Non-Operating
Gain (Loss) on Sale of Assets 0.0 0.0 0.0 0.0 0.0
Other, Net 123.3 38.0 21.2 -86.8 -76.7
Income Before Tax 4,166.4 3,674.4 3,200.7 2,346.4 1,662.1

Income Tax - Total 1,293.4 1,088.0 923.2 838.2 670.0

Income After Tax 2,873.0 2,586.4 2,277.5 1,508.2 992.1

Minority Interest 0.0 0.0 0.0 0.0 0.0

Equity In Affiliates 0.0 0.0 0.0 0.0 0.0
U.S. GAAP Adjustment 0.0 0.0 0.0 0.0 0.0
Net Income Before Extra. Items 2,873.0 2,586.4 2,277.5 1,508.2 992.1
 Total Extraordinary Items 671.2 15.8 1.0 -36.8 -98.6
Accounting Change
Discontinued Operations
Net Income 3,544.2 2,602.2 2,278.5 1,471.4 893.5

Total Adjustments to Net Income 0.0 0.0 0.0 0.0 0.0

Preferred Dividends
General Partners' Distributions

Basic Weighted Average Shares 1,234.0 1,260.4 1,259.7 1,269.8 1,273.1

Basic EPS Excluding
2.33 2.05 1.81 1.19 0.78
Extraordinary Items
Basic EPS Including Extraordinary
2.87 2.06 1.81 1.16 0.7
Items

Diluted Weighted Average Shares 1,251.7 1,274.2 1,273.7 1,276.5 1,281.5

Diluted EPS Excluding
2.3 2.03 1.79 1.18 0.77
Extrordinary Items
Diluted EPS Including
2.83 2.04 1.79 1.15 0.7
Extraordinary Items

Dividends per Share - Common

1.0 0.67 0.55 0.4 0.24
Stock Primary Issue
Gross Dividends - Common Stock 1,216.5 842.0 695.0 503.5 297.4
Interest Expense, Supplemental 402.0 356.1 358.4 388.0 388.4
Depreciation, Supplemental 1,249.9 1,249.5 1,201.0 1,113.3 971.1

Normalized EBITDA 5,896.3 5,318.9 5,165.3 4,262.1 3,821.1

Normalized EBIT 4,646.4 4,069.4 3,964.3 3,148.8 2,850.0
Normalized Income Before Tax 4,444.5 3,804.1 3,687.1 2,710.9 2,423.3
Normalized Income After Taxes 3,064.77 2,677.7 2,623.6 1,742.49 1,446.46
Normalized Income Available to
3,064.77 2,677.7 2,623.6 1,742.49 1,446.46
Common

Basic Normalized EPS 2.48 2.12 2.08 1.37 1.14

Diluted Normalized EPS 2.45 2.1 2.06 1.37 1.13
 Balance Sheet
Financial data in U.S. Dollars
Values in Millions (Except for per
share items)
2006 2005 2004 2003 2002
Period End Date 12/31/2006 12/31/200512/31/200412/31/2003 12/31/2002

Stmt Source 10-K 10-K 10-K 10-K 10-K

Stmt Source Date 02/26/2007 02/26/200703/04/200503/04/2005 03/05/2004
Stmt Update Type UpdatedReclassified Updated RestatedReclassified

Assets
Cash and Short Term
2,136.4 4,260.6 1,379.8 492.8 330.4
Investments
Cash & Equivalents
Total Receivables, Net 904.2 793.9 745.5 734.5 855.3
Accounts Receivable - Trade, Net
Total Inventory 149.0 144.3 147.5 129.4 111.7
Prepaid Expenses 435.7 640.2 585.0 528.7 418.0
Other Current Assets, Total 0.0 380.0 0.0 0.0 0.0
Total Current Assets 3,625.3 6,219.0 2,857.8 1,885.4 1,715.4

Property/Plant/Equipment,
20,845.7 19,573.3 20,703.1 19,924.7 18,583.4
Total - Net
Goodwill, Net 2,209.2 1,924.4 1,828.3 1,665.1 1,558.5
Intangibles, Net 0.0 0.0 0.0 0.0 0.0
Long Term Investments 1,036.2 1,035.4 1,109.9 1,089.6 1,037.7
Note Receivable - Long Term 0.0 0.0 0.0 0.0 0.0
Other Long Term Assets, Total 1,307.4 1,236.7 1,338.4 1,273.2 1,075.5
Other Assets, Total 0.0 0.0 0.0 0.0 0.0
Total Assets 29,023.8 29,988.8 27,837.5 25,838.0 23,970.5

Liabilities and Shareholders'

Equity
Accounts Payable 834.1 678.0 714.3 577.4 635.8
Payable/Accrued 0.0 0.0 0.0 0.0 0.0
Accrued Expenses 1,654.0 1,316.6 1,367.6 1,226.9 1,302.6
Notes Payable/Short Term
0.0 544.0 0.0 0.0 0.3
Debt
Current Port. of LT 17.7 658.5 862.2 388.0 275.5
Debt/Capital Leases
Other Current Liabilities, Total 502.3 910.6 576.4 556.2 208.1
Total Current Liabilities 3,008.1 4,107.7 3,520.5 2,748.5 2,422.3

Total Long Term Debt 8,416.5 8,934.3 8,357.3 9,342.5 9,703.6

Long Term Debt
Deferred Income Tax 1,066.0 949.2 781.5 1,065.3 1,003.7
Minority Interest 0.0 0.0 0.0 0.0 0.0
Other Liabilities, Total 1,074.9 851.5 976.7 699.8 560.0
Total Liabilities 13,565.5 14,842.7 13,636.0 13,856.1 13,689.6

Redeemable Preferred Stock 0.0 0.0 0.0 0.0 0.0

Preferred Stock - Non
0.0 0.0 0.0 0.0 0.0
Redeemable, Net
Common Stock 16.6 16.6 16.6 16.6 16.6
Additional Paid-In Capital 3,445.0 2,720.2 2,186.0 1,837.5 1,747.3
Retained Earnings
25,845.6 23,516.0 21,755.8 20,172.3 19,204.4
(Accumulated Deficit)
Treasury Stock - Common -13,552.2 -10,373.6 -9,578.1 -9,318.5 -8,987.7
ESOP Debt Guarantee -89.0 0.0 -82.8 -90.5 -98.4
Other Equity, Total -207.7 -733.1 -96.0 -635.5 -1,601.3
Total Equity 15,458.3 15,146.1 14,201.5 11,981.9 10,280.9

Total Liabilities &

29,023.8 29,988.8 27,837.5 25,838.0 23,970.5
Shareholders’ Equity

Total Common Shares

1,203.7 1,263.2 1,269.9 1,261.9 1,268.2
Outstanding
Total Preferred Shares
0.0 0.0 0.0 0.0
Outstanding
 Cash Flow Statement
Financial data in U.S. Dollars
Values in Millions (Except for per share items)
2006 2005 2004 2003 2002
Period End Date 12/31/200612/31/200512/31/200412/31/200312/31/2002
Period Length 12 Months 12 Months 12 Months 12 Months 12 Months
Stmt Source 10-K 10-K 10-K 10-K 10-K
Stmt Source Date 02/26/200702/26/200703/04/200503/05/200403/12/2003
Stmt Update Type Updated Restated Updated Updated Updated

Net Income/Starting Line 3,544.2 2,602.2 2,278.5 1,471.4 893.5

Depreciation/Depletion 1,249.9 1,249.5 1,201.0 1,148.2 1,050.8
Amortization 0.0 0.0 0.0 0.0 0.0
Deferred Taxes 28.7 -34.6 -171.9 181.4 -44.6
Non-Cash Items -318.1 107.6 0.0 36.8 98.6
Accounting Change
Unusual Items
Other Non-Cash Items
Changes in Working Capital -163.2 412.3 596.0 431.0 891.8
Accounts Receivable
Other Assets
Accounts Payable
Accrued Expenses
Taxes Payable
Other Liabilities
Other Assets & Liabilities, Net
Cash from Operating Activities 4,341.5 4,337.0 3,903.6 3,268.8 2,890.1

Capital Expenditures -1,741.9 -1,606.8 -1,419.3 -1,307.4 -2,003.8

Purchase of Fixed Assets
Other Investing Cash Flow
468.5 -211.0 36.2 -62.2 -462.8
Items, Total
Acquisition of Business
Sale of Business
Other Investing Cash Flow
Cash from Investing Activities -1,273.4 -1,817.8 -1,383.1 -1,369.6 -2,466.6

Financing Cash Flow Items 272.6 25.2 -82.5 49.3 310.9

Other Financing Cash Flow
Total Cash Dividends Paid -1,216.5 -842.0 -695.0 -503.5 -297.4
Issuance (Retirement) of Stock,
-1,983.7 -433.9 -40.5 -391.0 -670.2
Net
Issuance (Retirement) of Debt,
-2,264.7 1,612.3 -815.5 -891.6 145.5
Net
Cash from Financing Activities -5,192.3 361.6 -1,633.5 -1,736.8 -511.2

Foreign Exchange Effects 0.0 0.0 0.0 0.0 0.0

Net Change in Cash -2,124.2 2,880.8 887.0 162.4 -87.7

Net Cash - Beginning Balance 4,260.6 1,379.8 492.8 330.4 418.1

Net Cash - Ending Balance 2,136.4 4,260.6 1,379.8 492.8 330.4
 10 Year Summary
Income Statement - 10 Year Summary (in Millions)
Sales EBIT Depreciation Total Net Income EPS Tax Rate (%)
12/06 21,586.4 4,166.4 1,249.9 2,873.0 2.3 31.04
12/05 19,832.5 3,674.4 1,249.5 2,586.4 2.03 29.61
12/04 18,594.0 3,200.7 1,201.0 2,277.5 1.79 28.84
12/03 17,140.5 2,346.4 1,113.3 1,508.2 1.18 35.72
12/02 15,405.7 1,662.1 971.1 992.1 0.77 40.31
12/01 14,870.0 2,329.7 945.6 1,636.6 1.25 29.75
12/00 14,243.0 2,882.3 900.9 1,977.3 1.46 31.4
12/99 13,259.3 2,884.1 858.1 1,947.9 1.39 32.46
12/98 12,421.4 2,307.4 881.1 1,550.1 1.1 32.82
12/97 11,408.8 2,407.3 793.8 1,642.5 1.15 31.77
Balance Sheet - 10 Year Summary (in Millions)
Current Assets Current Liabilities Long Term Debt Shares Outstanding
12/06 29,023.8 13,565.5 8,416.5 1.2 Bil
12/05 29,988.8 14,842.7 8,934.3 1.3 Bil
12/04 27,837.5 13,636.0 8,357.3 1.3 Bil
12/03 25,838.0 13,856.1 9,342.5 1.3 Bil
12/02 23,970.5 13,689.6 9,703.6 1.3 Bil
12/01 22,534.5 13,046.1 8,555.5 1.3 Bil
12/00 21,683.5 12,479.1 7,843.9 1.3 Bil
12/99 20,983.2 11,344.1 5,632.4 1.4 Bil
12/98 19,784.4 10,319.7 6,188.6 1.4 Bil
12/97 18,241.5 9,389.9 4,834.1 1.4 Bil
STAFF AND SALARY
• There are about 12employees at this particular branch of McDonalds.
• Their remuneration is on a monthly basis given to them on the 7th of every month
which comes from 8-9% of total sales.
• At rush hour times maximum employees are present.
• No employee is allowed a meal at McDonald.
• In case of financial aid required by the employees only their salary is advanced to
them.
• In case of medical aid the ESIC looks after them.

Employee Benefit Programs May be the Answer to High Turnover Rates

Service-industry employers across the country, who mainly hire minimum-wage workers,
have been complaining for years that they cannot find or keep “good” help. An ex-
McDonald’s franchise owner, Steven Bigari, believes he has found an answer. In the
1990’s Bigari, from Colorado, bought several McDonald’s restaurants and during the first
year his employee turnover rate was close to 280%. By adding a menu of benefits for his
employees, he reduced his turnover rate to only 135% in one year. So, even though these
additional benefits increased his operating costs, the savings from lower employee
turnover increased his profit margin by three percent.
The benefit packages that Bigari first implemented at McDonalds focused on dealing
with the issues that impacted his turnover rates the most: child care, transportation, and
health care. In an interview Bigari gave to the National Retail Association he explained
his philosophy, “The keys to escaping poverty are three: hard work, education and
relationships. The family used to provide the support mechanisms necessary to
accomplish these. Erosion of the family along with the nomadic life we live in America –
especially poor folk – has eroded the base of the support or infrastructure that the
working poor require. We’re providing [a] family-like relationship of support structures
to help people who want to become – and this is key – want to become successful”.
His program has had such a proven track record in reducing costs that McDonalds’
corporate headquarters is now encouraging all of their franchisees’ to implement similar
“McFamily” programs.
SHORTAGES AND CONTINGENCIES
• In case of shortage of cash it comes from the pocket of the manager, which he can
claim later.
• In case of shortage of stocks especially fresh vegetables they either approach the
retail stores or nearby local market.
• In case there’s any loss the manager has to justify the loss.

SURPLUS
• If they exceed their target they have to inform the Head Office and then they
accordingly get bonus

WASTAGES
• There’s a money back policy for customers who are not satisfied with their order.

EXPENSES
• The repairing of equipments is done from the money from sales.
• The wallpapers, furniture, etc. are all from USA their main centre.
 Papa Johns

Brief History:
Born Jonathan David Samuel Jones in Chicago, Illinois, he moved to Alabama where he
learned to play several instruments, including saxophone, piano, and drums. He worked
as a drummer and tap-dancer at carnival shows until joining Walter Page's band, the Blue
Devils in Oklahoma City in the late 1920s. He recorded with trumpeter Lloyd Hunter's
Serenaders in 1931, and later joined pianist Count Basie's band in 1933. Jones, Basie,
guitarist Freddie Green and bassist Walter Page are one of the more important rhythm
sections in jazz. Jones took a brief break for two years when he was in the military. He
played with the band until 1948 and performed in the Jazz at the Philharmonic concert
series.

Jones split off from the band in the late 1940s and created an image for himself. He was
one of the first drummers to promote the use of brushes on drums and shifting the role of
timekeeping from the bass drum to the hi-hat cymbal. Jones is regarded as the premier
jazz drummer of the Swing era, and the transitional figure between classic and modern
jazz drumming.

He had an incalculable influence on major drummers such as Buddy Rich, Kenny Clarke,
Roy Haynes, Max Roach, and Louie Bellson. He also starred in several films, most
notably the musical short Jammin' the Blues in 1944. In 1985 Jones was the recipient of
an American Jazz Masters fellowship awarded by the National Endowment for the Arts.
CASH MANAGEMENT- Report

They receive an impressed amount of Rs.20,000 from the head office on a monthly basis.
Out of which 7,500 goes in as float which is the initial amount. And the petty cash
amount is 10,500. An amount of Rs.1500 is separated from the float amount.
The petty cash amount is used for buying raw materials (vegetables). But all the base
materials including bread and special sauce are on credit basis. The payment for all of
this comes in the form of a cheque from the head office.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities

Our common stock trades on The NASDAQ Global Select Market tier of The NASDAQ
Stock Market
under the symbol PZZA. As of February 20, 2007, there were approximately 796 record
holders of
common stock. However, there may be significantly more beneficial owners of our
common stock than
there are record holders. The following table sets forth, for the quarters indicated, the
high and low
closing sales prices of our common stock, as reported by The NASDAQ Stock Market.
All sales prices
have been adjusted to reflect a two-for-one split of the Company’s outstanding shares of
common stock.
The stock split was effected in the form of a stock dividend and entitled each shareholder
of record at the
close of business on December 23, 2005 to receive one additional share for every
outstanding share of
common stock held on the record date. The stock dividend of approximately 16.5 million
shares of
common stock was distributed on January 13, 2006.
The share repurchase authorization increased from $525.0 million to $575.0 million in
April 2006, increased to $625.0 million in November 2006 and increased to $675.0
million in February 2007. For presentation purposes, the maximum dollar value of shares
that may be purchased was adjusted retroactively to December 26, 2005.
In connection with a two-for-one stock dividend issued to shareholders of record as of
December 23, 2005, we retired all shares held in treasury at that date. Common shares
repurchased after December 23, 2005 are held in treasury.
Selected Financial Data

The selected financial data presented for each of the years in the five-year period ended
December 31, 2006 was derived from our audited consolidated financial statements. The
selected financial data should be read in conjunction with “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and the “Consolidated
Financial Statements”
Summary of Operating Results from Continuing Operations
The company follows a fiscal year ending on the last Sunday of December, generally
consisting of 52 weeks made up of four 13-week quarters, which are in turn made up of
two four-week periods followed by one five-week period. In 2006, the company’s fiscal
year consisted of 53 weeks, with the additional week added to the fourth quarter (14
weeks) results. The additional week resulted in additional revenues of approximately
$20.0 million and additional pre-tax income of approximately $3.5 million, or $0.07 per
diluted share for both the fourth quarter and full year of 2006. Total revenues increased
3.4% to $1.0 billion in 2006 compared to $968.8 million in 2005 primarily consisting of
the following:
• Company-owned restaurant sales increased $13.4 million as an increase in comparable
sales of
3.6% and the impact of the 53rd week of operations more than offset a reduction in
equivalent
units. “Comparable sales” represents sales generated by restaurants open for the entire
twelvemonth
period reported. “Equivalent units” represents the number of restaurants open at the
beginning of a given period, adjusted for restaurants opened, closed, acquired or sold
during the
period on a weighted average basis.
SHORTAGES AND CONTINGENCIES
• In case of shortage of cash it comes from the pocket of the manager, which he can
claim later.
• In case of shortage of stocks especially fresh vegetables they either approach the
retail stores or nearby local market.
• In case there’s any loss the manager has to justify the loss.

SURPLUS
• If they exceed their target they have to inform the Head Office and then they
accordingly get bonus

WASTAGES
• There’s a money back policy for customers who are not satisfied with their order.

EXPENSES
• The repairing of equipments is done from the money from sales.
• The wallpapers, furniture, etc. are all from USA their main centre.
A Successful Cash Management

People, technical understanding and getting the job

done
• Successful cash management starts with people
and culture: changing behaviour at all levels often
drives bigger sustainable gains.

• Experienced people who know where to look and

know what is achievable will be a catalyst for changes
in behaviour.

• A certain style of management is required to maintain

enthusiasm and keep the gains.

There are three strands to successful cash

management:

• People;
• Technical understanding;
• Getting the job done.
Information Management & Transaction Control
ZERO BALANCE ACCOUNT SERVICE
The Zero Balance Account (ZBA) Service keeps company funds concentrated in a
central account while maintaining decentralized disbursement and/or collection
accounts. As debits are applied to zero balance accounts, funds automatically transfer
from the master account to bring the ledger balance to zero. ZBA provides efficient
centralized use of available funds while retaining the appropriate disbursement
authority at local units. The perfect balance between control and autonomy!

Need of ZBA if company:

• maintains multiple checking accounts
• maintains excess balances in accounts to cover expected or
unexpected disbursements
• has accounts that can be affiliated and their funds commingled
• has multiple accounts that require significant administration
• frequently transfers funds between accounts
• has the need to fund a separate payroll account
• needs to set up peg balance for check cashing
CHASELINK
ChaseLink will help to simplify your daily cash management functions by providing
timely access to a wide range of information on the accounts. Additionally, you can
initiate transactions directly from the personal computer.
Using a personal computer and a modem, multiple users within the organization
can gain on-line access to the ChaseLink system from anywhere in the world
24 hours a day, seven days a week. Sophisticated security capabilities enable
you to closely control who has access to the ChaseLink system, and the tasks
they are authorized to perform.

Need of ChaseLink if company:

• requires comprehensive, fast and accurate information in an easy to use format
• requires a variety of reported information
• needs initiation features to facilitate funds transfers and investments
• maintains multiple locations that need to access balance and transaction
information
JPMorgan Accounts
Other Banks
ChaseLink Funds Transfer Service
The ChaseLink Funds Transfer Service makes it possible for you to securely initiate,
receive and review funds transfers on-line. The system prompts you through each
step of the initiation process and includes security measures built in to each step.
The system allows you to move easily between initiating payments, accessing
reports and retrieving payment confirmations.
The ChaseLink Funds Transfer Service provides a comprehensive array of reports and
information, in summary or detail form, on transactions entered today, yesterday or
any date range within the last 60 days.

Need of ChaseLink Funds Transfer if company:

• initiates large-dollar transactions – at least five wires per month
• has multiple locations
• maintains excess cash in depository accounts
• requires same day movement of funds
• requires immediate confirmation of payments generated and received
AUTOMATED CLEARING HOUSE (ACH)
Collection & Concentration Service
The ACH Service offers fast and powerful ways to improvethe cash flow
from
both your customers and regional offices.The customers authorize an
electronic
debit from their account at any participating financial institution. Then,
funds are
electronically transferred from your customers’ on the specified dates.
All you have to do is transmit your NACHA formatted file of debits to
JPMorgan for processing.The benefit from reduced delinquencies, the
elimination of bill preparation, late billing procedures and reduced
postage expenses.

Need of ACH Collection Services if company receives:

• insurance premiums, loan payments, utility payments, subscription
fees or
charitable contributions of at least 300 transactions each month
• maintains significant balances in outlying depository accounts
• needs a low cost method of transferring funds
• generates any recurring payments
• has geographically dispersed branches or regional centers
• has multiple banking relationships

Suggestions

• In case of McDonald’s…we suggest that they should try and provide at least a
meal once a day, for their employees so as to keep them motivated and happy
at their work place.
• With this suggestion being put in place, it increases better the capitalization of
the “word of mouth” marketing.
• Create a contingency fund in case of both KFC and McDonalds, so that
managers don’t have to pay out of their pocket.
• In both the cases there can be a better maintenance of transactions taking
place.