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Go back the Noodles case reading (class 1 folder) and analyze the income statement provided in the case. Follow the process described in class and in the Performance Assessment template:

a. Calculate and assess the trend in sales and compare to industry to draw a conclusion about Noodles ability to create value.

b. Calculate Gross Margin, Operating Margin, and Return on Assets. Compare each to industry. Draw an overall conclusion about Noodles ability to capture value.

Noodles TOTAL ASSETS

2017 = 185,233

2018 = 172,032

2019 = 378,519

2020 = 353,631

INDUSTRY AVERAGES:

Sales growth rates for each year-over-year starting from 2017-2020

4.4%, 3.5%, 3.9%, -14%

Gross Margin for years 2017-2020 (from 2017 up so 2020 is the last number)

40%, 42%, 43%, 44%

Operating Margin (same order)

7.2%, 6.9%, 6.7%, 6.5%

Return on Assets (same)

8.6%, 6.2%, 5.9%, 5.8%

FOR BOTH a and b, SHOW YOUR WORK in a table or by including calculated data in your write-up.

*For industry Averages, use:

Sales Growth: 2020 = -13.5%; Prior to 2020 (pandemic) sales growth was about 4% per year

Gross Margin: 65% (percentage of restaurant revenues; exclude Franchise fees)

Operating Margin: 7%

Return on Assets: 6% (based on Operating Income, not on Net Income)

Noodles Total Assets: 2020= 353,631; 2019= 378,519; 2018= 172,032; 2017= 185,233

STORES open at year end 2020 2019 2018 2017

Company Owned 378 389 394 448

Franchisee 76 68 65 65

TOTAL 454 457 459 513

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