Essentials of Financial Statement Analysis

1. From the business prospective of KKD, the company’s reputation for making tasty, high-quality doughnuts grew steadily throughout the southeastern United States in the 1960s and 1970s, thus, KKD Brand based on high quality product. In addition, there are several ways for KKD to generate revenues; some other revenues can offset one loss.

1. How does PPLS create value for its customers? What are the critical risks that it has to manage well?

Two traditional approaches to fund programs are grants and donations. Grant funding is typically the largest revenue source for a human service organization. Vast arrays of different grants are available for funding purposes. The XYZ Corporation can utilize these funds from government private foundations. The second traditional fundraising method to fund programs is donations. Building a relationship with the community and having a confident CEO that will reach out for donations can impact the amount of donations your organization receives annually. The XYZ Corporation has a large clientele and therefore should be able to gain recognition within the community and gain donations.

Sales (in millions) As reported (nominal) Adjusted (real) 2007 $178,199 $178,199 2006 $171,179 $176,019 % Change 4.10 1.24

Krispy Kreme (KKD) has achieved spectacular growth in the last few years using an area developer model to expand geographically. This case examines the factors that have driven its growth and their sustainability in the coming two years. Students are provided with forecasts made by financial analysts at CIBC. They are then asked to identify and evaluate the assumptions underlying these earnings forecasts. Since the CIBC report does not provide a forecasted balance sheet for KKD, the case can be used to let students learn how to build a forecasted balance sheet. Finally, the case can be used to discuss potential conflicts of interest between analysts and investors that might lead

1.Brand based on high quality product, highly differentiated products, high-volume production2.Fragmented (regional) competition with less brand recognition3.Strong opportunities to extend network of stores geographically.4.Great steps to insure customer satisfaction from the use of their proprietary flour recipe totheir automated doughnut making machines.

On April 5, 2000, they went public on the NASDAQ at $21 using the ticker symbol

List four basic financial statement analysis procedures, describe how you would calculate each procedure and discuss why you would use each procedure. Based on your reading and outside research, please communicate your own understanding of the requirements. Citations and references are required.

1. Compute the following ratios for 2007 using the financial statements prepared using Mexican FRS and expressed in pesos. [Assume the weighted average number of shares outstanding is 17,891,000]

The financial community in the United States has become increasingly concerned with the quality of reported company earnings.

KRISPY KREME, one of the successful companies in the food-service industry, began as a single doughnut shop in the early 20ths. The rapid expansion of its business scale made the corporation suffer its first economic crisis by the early 1980s. A group of franchisees later took charge of the heavily-debt company bringing new management ideas which helped the KRISPY KREME find way back to the game and become the role model in the industry. KK generated revenues through four primary sources: on-premises retail sales, off-premises sales, product mix and

Posted more than $4 billion in revenue and $235 million in net income in 2002

This case considers the sudden and very large drop in the market value of equity for Krispy Kreme Doughnuts, Inc., associated with a series of announcements made in 2004. Those announcements caused investors to revise their expectations about the future growth of Krispy Kreme, which had been one of the most rapidly growing American corporations in the new millennium. The task for the student is to evaluate the implications of those announcements and to assess the financial health of the company. This case is intended to be introductory as it can provide a first exercise in financial statement analysis and lay the foundation for two important financial

Krispy Kreme Doughnuts generated revenues through four primary sources: on-premises retail sales at company-owned stores (accounting for 27 percent of revenues); off-premises sales to grocery and convenience stores (40 percent); man­ufacturing and distribution of product mix and machinery (29 percent); and fran­chisee royalties and fees (4 percent). In addition to the traditional domestic retail locations, the company sought growth through smaller "satellite concepts," which relied on factory stores to provide doughnuts for reheating, as well as the devel­opment of the international market.

3. Assume that cost of goods sold for a company consists only of variable costs and gross margin is = (revenue – cost of goods sold)/revenue. Which of the following is true