Report on
Case analysis of
California Pizza Kitchen

Course (506): Cases in Financial Decision Making

SUBMITTED TO:
Dr. M. Sadiqul Islam
Professor
Department of Finance
University of Dhaka

SUBMITTED BY:
Group 21
MBA 16th Batch
Department of Finance
University of Dhaka

Date of Submission
April 08, 2015

Group No: 21
Serial
Name
BBA ID
MBA ID
1
Farhana Bondhon
16-004
16-615
2
Farha Farzana
16-006
16- 727
3
Marufa Akhter
16-132
16- 657

Letter of Transmittal

April 08, 2015
Dr. M. Sadiqul Islam
Professor
Department of Finance
University of Dhaka

Subject: Submission of Report.

Sir,
With pleasure, we present to you the report on “case analysis of California Pizza Kitchen” for the fulfillment of the course “Cases in Financial
Susan Collyns has several decisions that need to be made. Her two primary issues are how to finance expansion and the firm’s most appropriate capital structure. The focus of this analysis will be on the change in capital structure through the repurchase of shares at today’s market price of $22.10. Faced with this, CEO, Rick Rosenfeld was faced with a decision of how to combat this decrease, and what the company believed as a low valuation of their stock price. With no current debt, Rosenfeld began to contemplate whether it was ideal to repurchase shares, which could potentially leverage the company’s balance sheet. With a highly profitable business and an aversion to debt, CPK management is now considering a debt financed stock buyback program.

Products/services:

PEST Analysis:

Political Factors
There are many aspects one has to consider in the restaurant political environment in USA. One has to consider the many laws and regulations that affect the restaurant business. This can a cause for additional expenses, additional time and can be difficult for those who are not experts in the industry. The laws that affect the restaurant industry include; labor laws, taxation, food safety and other laws. The law on food safety is very specific to this industry and has rules for each type of food that is prepared. It can require training for employees and also a license to show one has abided with the law. Other laws such