Financial Analysis : Krispy Kreme

Krispy Kreme executives no longer rush to implement new plans before the time is right. They carefully study each geographical location to make sure its market will support a full-scale doughnut operation. Also, management spends time checking out sites for individual stores. Potential franchisee and employees are required to maintain certain standards and are thoroughly screened.

Moreover, some key activities are shown regarding to time in the period from the beginning of 2011 until the end of this year.

Ratio analysis is a very useful tool when it comes to understanding the performance of the company. It highlights the strengths and the weaknesses of the company and pinpoints to the mangers and their subordinates as to which area of the company requires their attention be it prompt or gradual. The return on shareholder’s fund gives an estimate of the amount of profit available to be shared amongst the ordinary shareholders; where as the return on capital employed measures an organization 's profitability and the productivity with which its capital is utilized. Return on total assets is a profitability ratio that measures the net income created by total assets amid a period.

Finances were examined in affective processing, in the context of figuring out who should the people invest in to get there profitable outcome. Both MCD and QSR are going to have their differences in what they each bring to the table, however, reviewing the cash flow, income statement and financial activities, this narrative research paper is going to explain what is going to have the greater advantage in the end. The bigger bang for your buck if you will. Processing all the information will give us the insight to figure out this great comparison.

Return on Total Assets was 4.43% which is below five percent. That indicates that the company is not accurately converting its assets into profit. The total for Return on Stockholders’ Equity was 8.89%, however financial analysts prefer ROE to range between 15-20 %. The company’s low ROE indicates that the company is not generating profit with new investments. Lastly, Debt-to-Equity ratio for the company was 1.01 which indicates that investors and creditors are equally sharing assets. In the view of creditors, they see a high ratio as a risk factor because it can indicate that investors are not investing due to the company’s overall performance. The totals of these three ratios demonstrate that the company’s financial state is not as healthy as it should be.

Liquidity ratios measure how well a company is able to meet its short term obligations without relying on selling inventory (David, Fred). Starbucks three main components in these current categories are cash, inventory and accrued liabilities. The current ratio indicates that if Starbucks needed to liquidate they would be able to cover their current liabilities. They would be unable to meet their outside obligations without selling off inventory to

This is said because the return on assets ratio is low. When it is low the company uses less money on more investment. The profit margin is low as well calculated at only .6% showing that Kudler Foods had a low profit at that reporting time.  The debt to total assets ratio was .28%, which showed the company is healthy. The times interest earned ratio was 9.8%, which backs up claims of financial health. The solvency ratio shows Kudler Foods can pay back long-term obligations. Each ratio has different users interest in mind. Return on common stockholder’s equity is defined as Net Income / Total Capital, and Return on Common Stockholders’ Equity: 676,795 / 1,928,960 = 35.09% Return. Here is a comparison of this (2003) information to the same information from last years’ (2002) records to begin to determine a trend.

To calculate the current ratio, which is one of the most popular liquidity ratios you divide all of firms current assets by all of its current liabilities. McDonalds has $1,819.3 (*everything is in millions for McDonalds) of current assets and $2,248.3 in current liabilities making the firms current ratio .81. In 2005 Wendys has current assets of $266,353 and current liabilities of $296,687 making their current ratio .90. Current ratios are used to represent good liquidity and financial health. Since current ratios vary from industry to industry, the industry average determines if a firms current ratio is up to par, strength or a weakness. In any event if the current ratio is less than the industry average than an analyst or individual interested in investing might wonder why the firm isn't

| The ROE decreased in the last year but still in the good margin of profitability.

Next is Asset turnover with .55 times which is a measure of the efficiency of asset utilization. Finally the equity multiplier with 2.26 which is a measure of financial leverage of the firm. When compared to the traditional ratios we get similar results; Profit margin 25.44% (27% DuPont) versus 18.75% industry average. Asset turnover is .54 (.55 DuPont) versus .50 industry average. Equity multiplier 2.28 times (2.26 times DuPont) versus 2 times industry average. The results show that the DuPont analysis using ROE as the main determinant are very similar to the regular ratios. Furthermore the ROE of the traditional ratio is 31.32% with DuPont being 33.10% versus the industry average of 18.75% shows that the firms ROE is very robust. While the firm has some challenges with respect to liquidity and inventory management, as well as debt management it still is doing a good job with respect to its shareholders. However it could be doing a little better for the stockholders, and needs to address some of the above issues mentioned.

The historical financial statements can tell us a lot about the financial health and condition about Krispy Kreme or any other company. By utilizing some key financial ratios we can determine how the company compares year over year as well as against competitors in many ?different dimensions. These dimensions include short term solvency, or its ability to meet its immediate obligations, long term solvency, or its ability to manage debt leverage, asset management, or its ability to

Krispy Kreme has experienced dramatic growth over the past 5 years based on their income statement. Every line on the income statement has grown rather impressively. Revenues have grown from $220M to $666M and net income has grown from $6M to $57M. Based on the income statement, Krispy Kreme is doing very well.

The company’s financial performance looks quite good at the end of Feb 1, 2004. From the exhibit 1, income statement, we can see that Krispy Kreme was growing from the year ended Jan 30, 2000 to the year ended Feb 1, 2004. Total revenue increased significantly 202% from US$ 220,243 thousands in Jan 30, 2000 to US$ 665,592 thousands in Feb 1, 2004. Net income increased 858% from US$ 5,956 in Jan 30, 2000 to US$ 57,087 thousands in Feb 1, 2004. The balance sheet in exhibit 2, looks as good as the income statement in

There are currently 18,875 KFC outlets in 118 countries worldwide and it is the world's second largest fast food restaurant chain. Throughout the years, it has expanded internationally throughout the years.

The company under analysis in this report is Dunkin Donuts. The brand of Dunkin Donuts originated in 1950 when Bill Rosenberg opened the very first outlet in Massachusetts, USA. Today Dunkin' Donuts is the world's leading baked goods and coffee chain, serving more than 3 million customers per day worldwide. It sells about 52 varieties of donuts and more than a dozen coffee beverages as well as an array of bagels, breakfast, sandwiches, subs and other baked goods. Dunkin Donuts is a subsidiary company of Dunkin Brands Inc that owns companies like Dunkin Donuts, Baskin Robins etc. Dunkin Donuts is a multinational company with its presence in more than 32 nations. By the end of 2011, there were 10,083 Dunkin' Donuts stores worldwide that included 7,015 franchised restaurants in the United States of America and 3,068 international outlets in more than 32 countries across the globe employing more than 9000 people. According to the financial report published by Dunkin Brands Inc, the parent company of Dunkin Donuts the net sales worldwide totaled up to $8.77 billion, up 5.2 percent from the previous year and the Net income for the year was $108.3 million, up 214.5 percent as reported by the company.