Case Study: Comparing Companies Assignment
School of Business, Liberty University
BUSI: 532: Advanced Financial Statement Analysis
Dr. Debra Touhey
August 31, 2025
When reviewing the financial information from the textbook, I created an excel
spreadsheet to be able to easily track numbers and connect cells to each other. After reviewing
the first question, which was: Determine the amounts of sales revenue per company-owned
store and franchise fees per franchised store for each year and each company. In these
computations, use the average number of stores open during the year. To compute the average
number of company and franchised stores open during a specific year I added the previous year
with the current year and divided it by two. The sales revenue per company owned store for the
current year was found using the sales revenue for that year and dividing it the average number
of stores which was computed above. The answers for each year are shown below for Buffalo
Wild
Wings.
Buff
2008 2009 2010 2011
Average Number of Stores Open During Year
Company Owned 179.0 214.5 245.5 289.0
Franchised
Sales Per Store (In Millions $)
347.5 391.5 446.5 485.5
Sales Revenue per Company Owned Store $ 2.12 $ 2.28 $ 2.26 $ 2.48
Franchise Fee Revenue per Franchised Store $ 0.12 $ 0.13 $ 0.13 $ 0.14
The same steps were used to calculate the answers for McDonalds.
Buff
2008 2009 2010 2011
Average Number of Stores Open During Year
Company Owned 179.0 214.5 245.5 289.0
Franchised
Sales Per Store (In Millions $)
347.5 391.5 446.5 485.5
Sales Revenue per Company Owned Store $ 2.12 $ 2.28 $ 2.26 $ 2.48
Franchise Fee Revenue per Franchised Store $ 0.12 $ 0.13 $ 0.13 $ 0.14
The second question stated: Assume that for both companies’ sales at company-owned
store are the same (on a per store basis) as sales for the same company’s franchised stores.
Estimate each company’s franchise fee rate, which is stated as a percentage of each franchisee’s
sales revenue. To estimate the franchise fee rate, I divided the franchise fee revenue per
franchised store by sales revenue per company owned store.
Sales Revenue per Company Owned Store $ 2.47 $ 2.42 $ 2.56 $ 2.85 $ 2.85
Franchise Fee Revenue per Franchised Store $ 0.28 $ 0.28 $ 0.30 $ 0.33 $ 0.33
Buffalo Wild Win
2008 2009 2010 2011 2012
(In Millions $)
Sales Revenue Per Company Owned Store $ 2.12 $ 2.28 $ 2.26 $ 2.48 $ 2.75
Franchise Fee Revenue per Franchised Store $ 0.12 $ 0.13 $ 0.13 $ 0.14 $ 0.15
The third question stated: Perform a cause-of-change analysis from 2008 to 2012 for
each company to disaggregate the increase in revenues from company-owned stores between
growth in the average number of average stores open and growth in revenues per store. Also
perform a cause-of-change analysis from 2012 to 2016. The answer to this question is shown
below and was calculated by transferring over sales revenue from the desired years for 2008,
2012, and 2016 for both companies. The change in sales revenue was calculated by subtracting
the change in number of stores and multiplying it by the corresponding year.
Sales Revenue Per Company Owned Store $ 2.12 $ 2.28 $ 2.26
Franchise Fee Revenue per Franchised Store $ 0.12 $ 0.13 $ 0.13
Estimated Franchise Fee Rate
(In Millions $)
5.79% 5.63% 5.75%
Sales Revenue Per Company Owned Store $ 2.47 $ 2.42 $ 2.56
Franchise Fee Revenue per Franchised Store $ 0.28 $ 0.28 $ 0.30
Estimated Franchise Fee Rate 11.29% 11.64% 11.64%
Buffalo Wild Wings (In Millions $)
The fourth question was: Perform similar analyses for franchise fee revenues. To
calculate the answer for this question I did the same calculations in question three, just with the
franchise fee revenues. The answer is shown below.
Change in sales revenue due to change in sales per store $ 221.57 $ 2,504.78
2012 Sales Revenue $964.00
2012 Sales Revenue $964.00
Change in sales revenue due to change in number of stores $ 725.75 $ (1,313.15)
Change in sales revenue due to change in sales per store $ 201.85 $ (1,994.35)
2016 Sales Revenue
(In Millions$)
$1,891.60
Buffalo Wild Wings
2008 Franchise Fee Revenue $ 42.70
Question five states: What do your analyses from requirements 3 and 4 tell you about
the companies’ growth strategies and how they differ from each other and over time? According
to the textbook, the cause-of-change analysis is to show the effects of changes in various
elements of financial performance on the change in some performance metric of interest
(Soffer, 2020). In this case, the metrics that are being manipulated are the change in revenue
due to change in number of stores and change with franchise fees and sales per store. Cause-of-
change analysis can be used to see where the weak parts of a company are, and where they are
thriving, in this case it shows where the growth is for the two companies and how they can
maximize revenue
(Han, 2024). When looking at the requirements from questions three and four and Buffalo Wild
Wings, their growth mainly comes from the change in the number of stores compared to
McDonalds growth coming more from the change in sales per store. Through 2008 to 2012,
Buffalo Wild Wings generated more growth from increasing the number of stores they have
compared to per store volume. On the other side, McDonalds has generated their growth from
per store volume for both company owned and franchised stores.
References
Han, E. (2024, December 3). Root Cause analysis: What it is & how to perform one. Business
Insights Blog. https://online.hbs.edu/blog/post/root-cause-analysis
Soffer, L.R.D.C.B.J.F.M. L. (2020). Financial Reporting and Analysis: 2025 Release. McGraw-
Hill Higher Education (US).
