Global Environments in Accounting
University of Phoenix
Principles of Accounting
ACC/300

Global Environments in Accounting
Yum! Brands, Inc. is a worldwide food service company with over 40,000 restaurants in 125 countries. According to Yum! Brands financial statements the company has been profitable over the last two years. They have been able to this by lower the costs of food production. According to the Yum! Brands website over 70% of their revenue comes from outside the United States. Most of this expansion has occurred in developing markets were they have over 14,000 restaurants, which is nearly double of the nearest competitor. Yum! Brands has been able to position themselves for growth and would be a wise investment due to their long term growth potential. When reviewing data from the financial statements specifically we can see potential in the current ratio and the debt to worth ratios over the last two quarters. Yum brands current ratio for first quarter 2014 stands at 0.84 showing that the companies relative liquidity can handle the majority of their liabilities immediately. When compared to the last quarter of 2013 which stood at 0.75 we can see that liquidity rose by nearly 10 percent. Solvency is also a concern when reviewing possible investments and Yum brands finished the fourth quarter of 2013 with a 74% debt to worth ratio fell to 73% exhibiting growth in shareholder equity.
Yum! Brands Debt Security
A debt security, also known as fixed income securities, are any debt instrument that is sold or bought between two separate parties and has basic terms that are defined ("Debt," 2014). Terms that are defined are amount borrowed (notional amount), maturity/renewal date, and interest rate (“Debt,” 2014). CD’s, government bonds, municipal bonds, corporate bonds, zero-coupon securities, collateralized securities (such as CMO’s, CDO’s, and