Investing and Financing Activities of Wendy’s

During the year of 2012, interchange utilise for commit activities of Wendys totaled $189 jillion, change magnitude $131 jillion from 2011. The dickens largest commit activities appeared in Wendys statement of cash commingle are crownwork expenditures and acquisitions. Cash gravid expenditures of Wendys in 2012 totaling $197. 6 million, including $71. 9 million for reimaged and new Image activating restaurants, $13. 5 million for new restaurants, $28. 0 million for point-of-sale equipment, $23. 2 million for the construction of a new construction at its corporate headquarters and $61. million for various capital projects. In the diaphragm of 2012, Wendys acquired 54 franchised restaurants. The get harm was $38. 1 million in cash. Wendys also agreed to lease the palpable estate, buildings and improvements related to some of the acquired restaurants which were considered part of the purchase transaction. Wendys did not incur every(prenominal) material acquisition-rel ated costs. Some other important investing activities involved the enthronement in limited partnerships of indirect 18. 5% liaison in Arbys Restaurant Group, Inc. and virtually 11% cost method investment in Jurlique International Pty Ltd. On February 2, 2012, Wendys completed the sale of its investment in Jurlique and received issue of $27. 4 million. Wendys did this beca implement prior to 2009, Wendys had de enclosureined that all of its remaining $8. 5 million investment in Jurlique was impaired. Wendys realized that Jurlique cannot divine service them organize profit and decided to allot all of investment in Jurlique to harbor stockholders equity. In the meantime, Wendys can use this money to strength their capital expenditures.The sum up in cash used for investing activities is mainly because of the sale of Arbys in 2011. Wendys sold Arbys for $130. 0 million in cash and indirectly retained an 18. 5% interest in Arbys and during 2012, Wendys received a $4. 6 million dividend from the investment in Arbys. Wendys decided to sell Arbys because Arbys has been a weaker performer than Wendys in recent years afterwards Wendys and Arbys were merged in 2008. We deem it wise to sell Arybs because Wendys no longer wishing to worry about the poor consummation of Arbys but can build the dividend.On the other hand, cash used for investing activities of McDonalds totaled $3. 2 million in 2012, developmentd $596 million. The increase earlier reflected higher capital expenditures and lower proceeds from sales of restaurant businesses. During the year of 2012, the 2 largest investing activities appeared in the statement of cash flow of McDonalds are capital expenditures and sales of restaurant business and property. The two most important finance activities for Wendys are the proceeds from long-term debt and the repayments of long-term debt.On May 15, 2012, Wendys entered into a accredit Agreement including a senior secured term bestow facility of $1 ,125. 0 million, of which clear proceeds was $1,113. 8 million with draws on May 15, 2012 and July 16, 2012. Proceeds from the 2012 destination loanword were used to repay the outstanding amounts below the 2010 Term Loan of $467. 8 million, to give birth and purchase the outstanding Senior Notes of $565. 0 million and to pay substantially all of the Credit Agreement fees and expenses. The outflow of 2012 Term Loan constituted the second largest financing activity, the repayments of long-term debt.In these two activities, we can ferret out out that Wendy uses almost 85% of the 2012 loan to reimburse its previous debt, which shows us that the family does not have enough debt-paying ability. A good company who has the ability to practise profit to repay previous debt and make another investing is what all stockholders exigency to see, not utilise new loan to redeem old loan. In conclusion, we do not agree Wendys using these financing activities. They should improve their oper ation activities to increase profit.