Jonelle Feikis (Section 001) Micah Starkey (Section 002)

BACKGROUND AND HISTORY

Company background (present and past)

STOCKS AND DIVIDENDS

Wendys is authorized to issue up to 100,000,000 shares of preferred stock. The average cost per share during the 2012 fiscal year was $4.70. During 2011 through the first three quarters of 2012, Wendys paid dividends of $0.02 per share. However, during the last quarter of 2012 they paid dividends of $0.04 per share which was planned to continue into the first quarter of 2013.

OVERALL FINANCIAL INFORMATION - Revenue (2011- in millions)

Total Revenue Cost of Revenue Gross Profit $2,505,242 ($1,881,248) $623,994

- Expenses (2011- in millions)

Cost of Sales General and Administrative Depreciation and Amortization Impairment of long-lived assets Facilities relocation costs and other transactions Other operating expense Total Expense $1,881,200 $287,800 $147,000 $21,100 $41,000 $4,400 $2,382,800

- Contribution Margin (2011- in millions)

Total Sales Variable Costs Contribution Margin Contribution Margin Ratio = 14.4% $2,198,300 ($1,881,200) $317,100

Price/Earnings To Growth (PEG) Ratio: 2.07 Enterprise Value/Revenue (ttm)3: 1.29 Profit Margin: .28% Operating Margin: 7.03% Total Debt/Equity (mrq): 73.40

PRODUCT DEVELOPMENT ISSUES

The original chocolate Frosty, invented in 1969 has always been a customer favorite. But in 2006, owners believed creating a vanilla Frosty would help vamp up the classic chocolate. The vanilla Frosty has been very successful but over the course of the past 40 years Wendys has attempted to develop many other products stemming from the original Chocolate Frosty. In 1986, two different variants were introduced, the Frosty-Tea and Frosty-Forster. The two were

quickly removed due to lack of popularity. Over the years, similar variances of the Frosty have been introduced and failed to succeed and remain popular.

RELEVANT COSTS AND PROFITABILITY

According to the nutritional facts a medium Frosty contains the following ingredients: Milk, Sugar, Corn Syrup, Cream, Whey, Nonfat Milk, Cocoa (processed with alkali), Guar Gum, Mono and Diglycerides, Cellulose Gum, Carrageenan, Calcium Sulfate, Disodium Phosphate, Artificial Flavor, Vitamin A Palmitate The medium Frosty, 16 ounces, is priced at an average of about $1.69. That comes out to be about 10.56 cents an ounce. Because the lack of detailed information concerning the product cost of a Frosty the best estimate we can create is a profit using the contribution margin, 14.4%. Essentially, that would state that Wendys makes a profit of $0.24336 per medium chocolate Frosty.

REFERENCES
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDIQFjAA&url=h ttp%3A%2F%2Fphx.corporateir.net%2FExternal.File%3Fitem%3DUGFyZW50SUQ9MTI4NzA0fENoaWxkSUQ9LTF8VHlwZT0z%2 6t%3D1&ei=dR5NUfC9C6fuyQHao4H4DA&usg=AFQjCNFDeSOJZmHLIVhwyTCy3S9ELVw13w&sig 2=PtrNe0bWO4rUNwxEHR_YLQ&bvm=bv.44158598,d.aWM http://finance.yahoo.com/q?s=WEN http://en.wikipedia.org/wiki/Frosty_%28frozen_dairy_dessert%29 http://www.wendys.com/food/Nutrition.jsp?product_id=36 http://didntyouhear.com/wendys-gets-an-f-in-frosty-nomics/