Panera Bread Company (PNRA) operates over 2,000 bakery-cafe locations throughout the United States and Canada and serves over 9 million customers per week. Panera’s operations are divided into the following segments:

▪ Company-Operated Bakery-Cafes

▪ Franchised Bakery-Cafes

▪ Fresh Dough and Other Products

The Fresh Dough and Other Products segment supplies fresh dough, produce, tuna, and other products to the company-operated and franchised cafes. Recent data (in millions) for each of these segments are as follows:

a. Determine the profit margin for each segment. Round to one decimal place.

b. Determine the investment turnover for each segment. Round to two decimal places.

c. Use the DuPont formula to determine the return on investment for each segment. Round to one decimal place.

d. Which segment has the highest profit margin, investment turnover, and return on investment? Explain why.

e. If franchised cafes are more profitable, why would Panera operate company-owned cafes?

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Franchised Cafes Company-Operated Cafes Fresh Dough $408 28 87 Revenues Operating income Invested assets $2,434 398 943 $155 150 18