Darden Restaurant Financial Statements and Financial Ratios Analyzed from 2016 to 2020
Hey All,
Thanks for visiting my Darden Restaurant Financial Report page. On this page, you will be able to find preliminary information about Darden Restaurant's current financial performance as well as some historical track records and trends.
For a more detailed examination of Darden Restaurant's financial performance, please check out the "Financial Report". In this report, written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, you will find:
- Summarized income statement for the last 5 years.
- Summarized balance sheet for the last 5 years.
- Summary analysis by myself of important income statement, balance sheet, and financial ratio trends and other happenings.
- Five year’s worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
- Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
- Professional financial analysis tips provided in each section to help YOU conduct your OWN financial analysis!
- Each section includes an “in other words” segment. This is were I use plain English to explain concepts.
Enjoy the preliminary information and for a more detailed analysis, buy the financial report!
Sincerely,
Paul Borosky, MBA.
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Sample Financial Report
Darden Restaurant: Brief Summary
Darden Restaurants headquarters is located in Orlando, Florida. The company competes in the restaurant industry—specifically, the consumer cyclical sector. At present, the organization employs approximately 175,000 individuals. Darden Restaurant brands include the Olive Garden, Longhorn Steakhouse, Cheddar's Scratch Kitchen, the Capital Grille, and others. At present, the organization operates approximately 1,800 restaurants in the United States as well as Canada.
Darden Restaurant Financial Report Sources
“Darden Restaurant Inc. 2020 Company Analysis… For Beginners: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA. and owner of Quality Business Plan. In this report, the author selected Darden's 202010k, 2017 10k annual report, 2016 10k annual report, Darden's 2019 10k annual report as the basis for information gathering. Once all Darden's 10k annual statements were collected, the author then inserted Darden's s income statement information and Darden's balance sheet information into a customized financial template.
Darden Restaurant’s Income Statement – Summary Analysis
In this section, I walk through a broad definition as to what an income statement is and why it is important. From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail. After each line item is defined and discussed, I finally offer a summary analysis of Darden Restaurant's important income statement line item trends from 2016 to 2020, in most cases.
Revenue Growth:
Darden Restaurants ended 2016 with revenues at approximately $6.9 billion. In the next three years, the organization would increase revenues to approximately $8.5 billion. However, in 2020, the revenues would fall to $7.8 billion due to the coronavirus. In growth percentage terms, the organization's best growth was 12.7% from 2017 to 2018.
From an investor's perspective, $7.8 billion in revenues through the current economic climate is pretty good for a casual dining restaurant. An important factor for continued revenue growth in the coming years may be how the organization best adapts to the current economic environment. If the organization is able to provide a safe dining experience for customers, then they should expect moderate to low revenue growth in the next several years. However, if dining experiences continue to be perceived as dangerous, then plummeting revenue growth may be the result.
Darden Restaurants Income Statement Summary 2020 to 2016 |
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| Column1 | 2020 | 2019 | 2018 | 2017 | 2016 |
| Revenues | 7,806 | 8,510 | 8,080 | 7,170 | 6,933 |
| COGS | 2,240 | 2,412 | 2,303 | 2,070 | 2,039 |
| Gross Profit | 5,566 | 6,098 | 5,777 | 5,100 | 4,894 |
| SG&A | 376 | 405 | 409 | 387 | 384 |
| Depreciation | 356 | 336 | 313 | 272 | 290 |
| R & D | - | - | - | - | - |
| Other | - | - | - | - | - |
| Operating Expenses | 7,759 | 7,677 | 7,313 | 6,492 | 6,311 |
| EBIT | 48 | 832 | 766 | 677 | 622 |
| Other Income | - | - | - | - | - |
| Interest Expense | 57 | 50 | 161 | 40 | 172 |
| EBT | (9) | 782 | 605 | 637 | 450 |
| Taxes | (111) | 64 | 2 | 154 | 90 |
| Net Income | (52) | 713 | 596 | 479 | 375 |
Darden Restaurant’s Balance Sheet 2020 to 2016 – Summary Analysis
For Darden Restaurant's balance sheet, I again go through each important line item from the balance sheet. In reviewing each line item, I will define Darden's balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2016 to 2020. Next, I then offer a summary analysis of Darden’s important balance sheet line items.
Cash:
In 2016, Darden Restaurants had approximately $274 million in cash. In the next two years, the cash position would fall to $146 million in 2018. Fortunately, though, the 2019 and 2020, their cash position would substantially increase, ending 2020 at $763 million.
This cash position is noteworthy, not only because the organization has increased the cash position for the last two years. But, the firm was able to do it through the recent COVID outbreak. Possible reasons for this improvement could be cost-cutting measures, or the organization has taken out short and/or long-term debt to ensure liquidity.
Darden Restaurants Summary Balance Sheet 2020 to 2016 |
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| Column1 | 2020 | 2019 | 2018 | 2017 | 2016 |
| Cash | 763 | 457 | 146 | 233 | 274 |
| Short Term Investment | 0 | 0 | 0 | 0 | 0 |
| Account Receivable | 50 | 88 | 83 | 75 | 64 |
| Inventory | 207 | 207 | 205 | 178 | 175 |
| Other | 0 | 0 | 0 | 0 | 0 |
| Current Assets | 1101 | 892.6 | 553 | 587 | 820 |
| Net PPE | 2757 | 2552.6 | 2429 | 2272 | 2041 |
| Goodwill | 1037 | 1184 | 1183 | 1201 | 872 |
| Other | 0 | 0 | 0 | 0 | 0 |
| Total Assets | 9946 | 5893 | 5469 | 5292 | 4582.6 |
| Accounts Payable | 249 | 333 | 277 | 249 | 241.9 |
| Accrued Expense | 150 | 175 | 177 | 149 | 135.1 |
| Accrued Taxes | 6 | 12 | 0 | 1.9 | 0 |
| Notes Payable | 270 | 0 | 0 | 0 | 0 |
| LT Debt - Current | 0 | 0 | 0 | 0 | 0 |
| Other | 0 | 0 | 0 | 0 | 0 |
| Total Current Liabilities | 1793 | 1474 | 1384 | 1289 | 1187.1 |
| LT Debt | 929 | 928 | 926 | 936 | 440 |
| Other | 0 | 0 | 0 | 0 | 0 |
| Total Liabilities | 7615 | 3500 | 3274 | 3190 | 2630 |
| Common Stock | 2205 | 1685 | 1631 | 1614 | 1502 |
| Treasury | 0 | 0 | -7.8 | -7.8 | -7.8 |
| Retained Earnings | 144 | 807 | 657.6 | 560.1 | 547.5 |
| Other | 0 | 0 | 0 | 0 | 0 |
| Total Equity | 2331 | 2393 | 2194.8 | 2101.7 | 1952 |
| Total Equity & Liability | 9946 | 5893 | 5469.6 | 5292.3 | 4582.6 |
Section 3: Darden Inc. Financial Ratios Analyzed from 2016 to 2020
For this section, I have chosen about 16 different financial ratios to review for Darden Restaurant Inc from 2016 to 2020. In reviewing each of Darden's financial ratios, I first start with defining the financial ratio. Next, I supply the financial formula for calculating the specific ratio. Finally, I offer a brief analysis of important Darden's Financial ratios.
Darden's Current Ratio
Darden's current ratio has ranged between .4 and .69. In 2020, their current ratio was .61. For most industries, the optimal current ratio would be 1.0 or higher. However, in industries with high cash flows such as restaurants and retail stores, lower current ratios have become a trend. From this, the organization seems to have adequate short-term funding to cover its short-term liabilities.
Darden's Total Asset Turnover
Darden's total asset turnover ended in 2016 at 1.51. Over the next three years, the company improved upon its total asset turnover ratio. This resulted in a 1.44 total asset turnover in 2019. To continue this trend, the organization must continue to optimize the usage of all assets, which includes short-term as well as fixed. However, due to the COVID shutdown, the firm's total asset turnover was detrimentally impacted in 2020, ending the year at .78. Once the virus subsides, the firm should be able to continue their trend in optimizing total asset usage.
Darden's Return on Assets
Darden's return on assets had steadily increased between 2016 and 2019. This means that the company is making more money on the same or fewer assets. In 2016, their return on assets was 8.18%. 2019 ended with the company at 12.1%. To ensure that this trend continues, the company may increase its tables available at restaurants or design business strategies to increase its per table turnover. Unfortunately, in 2020, the organization's return on assets fell to -.53%. This was to be expected through a COVID outbreak. Again, once the virus subsides, the organization should be able to achieve a return on asset growth utilizing proven business models.
Liquidity Ratios - Darden Restaurants 2020 |
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| Ratios | 2020 | 2019 | 2018 | 2017 | 2016 |
| Current Ratio | 0.61 | 0.61 | |||
| Cash Ratio | 0.43 | 0.31 | |||
| Quick Ratio | 0.50 | 0.47 | |||
| Net Working Capital | 615 | 232 | |||
Asset Utilization - Darden Restaurants 2020 |
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| Ratios | 2020 | 2019 | 2018 | 2017 | 2016 |
| Total Asset Turnover | 0.78 | 1.44 | |||
| Fixed Asset Turnover | 2.83 | 3.33 | |||
| Days Sales Outstanding | 2.34 | 3.77 | |||
| Inventory Turnover | 37.71 | 41.11 | |||
| Accounts Receivable Turnover | 156.12 | 96.70 | |||
| Working Capital Turnover | 12.69 | 36.68 | |||
| AP Turnover | 31.35 | 25.56 | |||
| Average Days Inventory | 33.73 | 31.32 | |||
| Average Days Payable | 40.57 | 50.39 | |||
| Cash Conversion Cycle | (4.51) | (15.29) | |||
Profitability Ratios - Darden Restaurants 2020 |
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| Ratios | 2020 | 2019 | 2018 | 2017 | 2016 |
| Return on Assets | -0.53% | 12.10% | |||
| Return on Equity | -2.25% | 29.80% | |||
| Net Profit Margin | -0.67% | 8.38% | |||
| Gross Profit Margin | 71.30% | 71.66% | |||
| Operating Profit Margin | 0.61% | 9.78% | |||
| Basic Earning Power | 0.48% | 14.12% | |||
| ROCE | 0.59% | 18.83% | |||
| Capital Employed | 8,153 | 4,419 | |||
| ROIC | -16.13% | 27.44% | |||
Long-term Debt - Darden Restaurants 2020 |
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| Ratios | 2020 | 2019 | 2018 | 2017 | 2016 |
| Debt Ratio | 9.34% | 15.75% | |||
| Debt/Equity | 39.85% | 38.78% | |||
| Times Interest Earned | 0.84 | 16.64 | |||