Texas Roadhouse is an American-based restaurant that first opened its doors to the public on 17 February 1993. The restaurant was initially founded by |Kent Taylor in Clarksville, Indiana. His initial decision was to create a restaurant where people from different occupations would have a great time and not just enjoy the steak. Over twenty years later, the chain has grown to be a renowned brand with several locations within the country as long as a number of international franchises.
The restaurants’’ 2016, annual report indicates how the restaurant has continued over the years. As part of normal business operations, it is common to have nonrecurring items because every business has its own special needs from time to time. For instance, renovation costs or acquisitions of new machinery do not always take place every year. In our case, it is important to note that the restaurant experienced some extra profits during the 2015-2016 financial years. However, this cannot be attributable to a nonrecurring income or a write-off because the source of the additional revenue was diversified.
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In the first place, low commodity prices especially in the form of meat products were responsible for a decline in operational costs, which in turn led to an increase in company profits. Another factor leading to an increase in profits was the higher-than expected gift card sales during this financial period. A reducing need to have incremental working capital has also led to increases in profits, as the available capital is able to take care of normal transactions. Provisions of trade credit has also continued to play a role in profitability as the saved expenses have been adequately converted into operating income for the last couple of years. Lastly, the opening of new branches has also played a key role.
