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Strategies & Market Trends : Value Investing
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To: scbeachbum who wrote (76415)10/23/2024 12:10:47 PM
From: bruwin   of 78705
 
At a quick glance I'd say that DINE BRANDS (DIN) has a Large Debt problem.

Their LTD is ~12x their current LTM Net Income = 1086/92 = ~12. I'd say that number shouldn't be greater than about 3x.

That Debt has an Expense which is chewing up about 40% of DIN's Revenue left at its EBITDA level = 74/186 = ~40%. If that number was about 15% of EBITDA = 0.15 x 186 = ~28, then 74 - 28 = ~$46mil. would be available to work its way to DIN's Net Income.

Its Pretax Income currently is ~$107mil. Add $46mil. to that = 107 + 46 = 153.
Its Tax Rate is about 14%. So there will be about 153 x 0.86 = $132mil. of Net Income.

That will give a Bottom Line Profit percentage of 132/821 = 16% compared to its current 92/821 = ~11%.

DIN has a healthy Gross Profit of ~48%.
But I'd say that it could consider doing something about its SG&A Expense of ~$196mil. which is 196/392 = 50% of its Gross profit, and I'd say that is on the high side. Getting that down to, say, 35% would add about $58mil. of Revenue back into its Income Statement.

And the more Net Income there is, the more that gets added to the Left Side of the Balance Sheet Equation via "Retained Income", thereby improving Total Assets relative to Total Liabilities.

Chart probably reflects DIN's "Financials" State of Affairs --->

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