Study financial ratio calculation in Pearson Edexcel A Level Business through gross profit margin, ROCE, gearing, formula selection, working and precise answers.
Extract A The Five Guys' family, freshness and customisation Jerry and Janie Mitchell lived in Arlington, Virginia. In 1986 they gave their five sons a choice: start a business or go to college. The business route won and the family opened the first Five Guys - named after the five brothers.
To this day, the formula remains simple: 'Burgers and fries cooked to perfection' in keeping with Jerry's philosophy of 'To perfect and to serve.' The family is still very much involved in the business, meeting every Tuesday.
Five Guys is organised differently from other fast-food burger outlets. You will not find a freezer in any Five Guys restaurant because everything is cooked from fresh ingredients. Food is prepared every day for maximum freshness including hand cutting the potatoes. Employees do the cooking without timers and are trained to judge the food's readiness by sight, aroma and texture. In other fast-food outlets machines are used to cook the food and timers are relied on to indicate when the food is ready to serve.
The burgers, hotdogs and sandwiches come with up to 15 free toppings, giving 250,000 combinations to choose from. If you had one a day, it would take you 684 years to try them all and the milkshake machines give over 1,000 possible combinations.
Extract B Selected financial data for Five Guys (UK and Europe) 31 December 2020 and 2021
Extract C Data for purchasing a new £10000 milkshake machine for a Five Guys restaurant
Extract D How to Incentivise Your Crew The fast-food industry is well known for its over 100% labour turnover levels. Many businesses are relying on employee incentive programmes to retain their workers.
One popular way is using mystery shoppers. A mystery shopper is a person employed to visit a shop or restaurant anonymously to assess the quality of the goods and services.
Five Guys uses mystery shoppers to assess the quality of its food and the customer services given by employees. The information gathered from mystery shoppers is used to create weekly, monthly and quarterly rewards programmes for its employees.
Five Guys rewards the top 200 restaurants every week. The weekly reward is anywhere from $900 to $1 300 per restaurant. The money is shared between the employees working in the restaurant when they were mystery shopped.
Molly Catalano, Director of Communications and Marketing at Five Guys, said, "We think that our success can be seen in the increasing mystery shopper scores over time, in the satisfaction of our employees and in our growth as a company. We have seen success in all three areas."
Five Guys is still expanding and has 1,600 locations in 19 countries across the world.
Extract E Five Guys launches merchandise collection Five Guys, known for its burgers, hot dogs and milkshakes, has launched the first of its clothing lines branded with the Five Guys logo in the UK.
The main item from the collection is the black and white embroidered unisex college jacket that pays tribute to Arlington, Virginia, where the brand was founded in 1986. This follows the current trend for American-styled clothing, which has seen college jackets feature in high street and designer collections during summer 2022.
Alongside the college jackets are the official Five Guys t-shirts, featured in red, black and white, branded sweatshirts and hoodies, baseball caps and red-and-white checked sports socks. There is even a lightweight rain jacket with the Five Guys logo.
Prices start from £10 for the socks to £75 for the college jacket. T-shirts cost £20 each, while sweatshirts are priced at £35 and hoodies at £45. All can be purchased at the Five Guys online store.
Extract B Selected financial data for Five Guys (UK and Europe) 31 December 2020 and 2021
Using Extract B, calculate to two decimal places the return on capital employed
(ROCE) for Five Guys in December 2021. You are advised to show your working.