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Bruners Case 33

CALIFORNIA
PIZZA KITCHEN
GROUP 4

TEAM MEMBERS ROZALIA BINTI MOHD IBRAHIM  ( A157508 )


FATIN NAJIHAH BINTI RAMLI ( A157671 )
MUHAMMAD ZUL AL-AMIN BIN NOR AZLEE ( A157766 )
FERI AROSA ( A167168 )

LECTURER : DR. NOOR AZRYANI AUZAIRY


EPPM 3644 :  CORPORATE FINANCE - SET 4
LET'S WATCHING

VIDEO
HTTPS://WWW.YOUTUBE.COM/WATCH?V=N1TDPXSFK_S
COMPANY BACKGROUND

how it started
CPK was started in 1985 by attorneys Rick Rosenfield anin Beverly Hills,California United States

CPK headquarters in Los Angeles and its subsidiary in Sherman Oaks, California

CPK is widely known for its innovative and nontraditional Pizzas

CPK brand is licensed to Kraft in 1999

CPK had operated in a few countries such as Australia, Chile, Indonesia, India,  Hong Kong, Japan, etc.

CPK Strategi's is providing a casual, upscale, family restaurant, with good food

Source : California Pizza Kitchen Official website. Retrieved 24th November 2018, from

https://www.cpk.com/
Cpk
IN JULY 2017
FACTS
CPK Got Profit over 6 Million dollars

CPK strong revenue in resataurant sales up over 15 %

CPK has strong balance sheet

CPK had derived its revenue from three resources

(ales at company owned restaurant, royalties from

franchised restaurant and  royalties  from a

partnership with Kraft Food)

they had received about $50 k to $ 60 k per opening

and 5 % of gross sales from each location

Resource : Bruner, et al. (2014, Oct 08). Case Studies

in Finance : Managing for Corporate Value Creation

7th Edition. New York : The McGraw-Hill Companies


Cpk

ISSUES
There are two primary issues in California Pizza Kitchen. The two issues are

1) How to finance expansion

2) The firm’s most appropriate capital structure

We are focusing to the change in capital structure through the repurchase of share

being pressured Can't buyback Borrowing debt


Declined 10% of share current cash of the CPK has no debt, So they

price which is the company are not enough had the strong potential of

current value $ 22.10 to repurchase the share borrowing debt

Resources : Bruner, et al. (2014, Oct 08). Case Studies in Finance : Managing for Corporate
Value Creation 7th Edition. New York : The McGraw-Hill Companies
THE EFFECT OF REPURCHASE

WILL BE
ANALYZED
EBIT Breakeven

ROE

EPS

Cost of Capital

Stock Price Perspective

Resources :

https://www.mckinsey.com/business-

functions/strategy-and-corporate-

finance/our-insights/the-value-of-

share-buybacks
WACC

SHARE PRICE

BREAK EVEN EBIT

RETURN ON EQUITY

EARNING PER SHARE


ANALYSIS
RETURN ON INVESTED CAPITAL DISCUSSION
STOCK PRICE
WACC
SHARE PRICE
BREAKEVEN EBIT
RETURN ON EQUITY
EARNING PER SHARE
RETURN ON INVESTED
CAPITAL
STOCK PRICE
Cpk best
victoria's

CONCLU-
SION
FLAVOR VARIETY
BASED ON THE OVERALL
ANALYSIS

 California Pizza Kitchen ( CPK ) need

to choose 20% of debt financing

because at this percentage the

return of equity ( ROE ) was 10.19%.   


THANK YOU!
WACC

Bruner, et al. (2014, Oct 08). Case Studies in Finance :


Managing for Corporate Value Creation 7th Edition. New
York : The McGraw-Hill Companies
SHARE PRICE

Bruner, et al. (2014, Oct 08). Case Studies in Finance :


Managing for Corporate Value Creation 7th Edition. New
York : The McGraw-Hill Companies
BREAKEVEN EBIT

Bruner, et al. (2014, Oct 08). Case Studies in Finance :


Managing for Corporate Value Creation 7th Edition. New
York : The McGraw-Hill Companies
RETURN ON EQUITY

Bruner, et al. (2014, Oct 08). Case Studies in Finance :


Managing for Corporate Value Creation 7th Edition. New
York : The McGraw-Hill Companies
EARNING PER SHARE

Bruner, et al. (2014, Oct 08). Case Studies in Finance :


Managing for Corporate Value Creation 7th Edition. New
York : The McGraw-Hill Companies
RETURN ON INVESTED CAPITAL

Bruner, et al. (2014, Oct 08). Case Studies in Finance :


Managing for Corporate Value Creation 7th Edition. New
York : The McGraw-Hill Companies
STOCK PRICE

RESEOURCE
Bruner, et al. (2014, Oct 08). Case Studies in Finance :
Managing for Corporate Value Creation 7th Edition. New
York : The McGraw-Hill Companies