Krispy Kreme Doughnuts, Inc.

2) The higher ratio of Debt to Total Equity may result to the lower of the debt credit rating. The lower of the credit rating will result to increase of the interest rate which will cost more to the company.

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

I have reviewed the past two years liabilities and stockholders’ equity sections of Tootsie Roll Industries, Inc. and compared the balance sheets using Debt to Equity Ratio and Times Interest Earned. The calculations presented in thousands:

A more tell tale sign is the quick ratio, or acid test, which has increased year after year. Debt to total assets has decreased over 5% since 2001, indicating less financing of current and long term debt and more company assets. Their cash debt coverage far surpasses the ideal 20%, indicating a high level of solvency with sufficient funds and assets to satisfy all debtors. Asset turnover has more or less maintained at right around 1.6, signifying a turnover rate of just less than 180 times per year.

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.

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.

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

While analyzing AT& T a few differences are noted. As with Verizon, the current ratio did improve with an increase of five percent from 58% in 2005 to 63% in 2006. However, even though debt to equity decreased for both companies AT & T's decrease was only 4% compared to Verizon's significant decrease of 23%. The net profit margin ratio did opposite changes between the two companies while Verizon's increase not even one full percent AT &T's decreased by almost 3%. Even with these significant changes AT & T's price to earnings, as of 2006, was at 20.89 (www.hoovers.com). These variances tell us a couple of things. First, that AT& T has taken on more debt in 2006 versus 2005, but along with that debt they have been able to increase their net profit margin, helping the company in the way of earnings. The strong price to earnings ratio of 20.89 also shows that the shareholders are not faring too poorly either.

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

This paper reviews the Cash Flow Statements of Yum Brands, Inc., Panera Bread, and Starbucks documented by case study 10-10 in our textbook for the purpose of analyzing financial health based on cash flow data. (Gibson, 2013).

Compared to their major competitor, current ratio and quick ratio of KKD is the highest among all of them which show that their ability to meet their short term liabilities is the highest among all of them even though KKD too much depend on their trade receivable and other current assets. This will give a good sign to their supplier to give them more short term debt facilities in the future because KKD have high ability to meet it and financially in healthy position in managing their current assets,

The debt-to-capital ratio gives users an idea of a company's financial structure, or how it is financing its operations, along with some insight into its financial strength. The higher the debt-to-capital ratio, the more debt the company has compared to its equity. Star River has always depended much on debt for its financing and the trend shows this ratio may get higher in future. Star River, with high debt-to-capital ratios, compared to a general or industry average, may show weak financial strength because the cost of these debts may weigh on the company and

The Debt-Equity Ratio shows that most of the capital was in terms of ordinary shares and is becoming more reliant on Shareholders Equity than on debt to finance operations.

From the balance sheet, we see that account receivable and account receivable from affiliates had risen significantly since 2000. In my opinion it was caused by deteriorating financial performance of Krispy Kreme’s affiliates so that Krispy Kreme gave them extension to repay their bills. We can also see that inventory increased since 2000. In my opinion, it was not good since inventory could be obsolete. It would decrease inventory turnover. For asset held for sale, there was a significant decreased from Feb 1, 2004 to May 2, 2004 due to the disposal of Montana Mills. This was the main factor for decreasing the current asset in that period. Krispy Kreme overstated its intangible assets (reacquired franchise rights) because they did not amortize it. On the liabilities and equity sides, we see the most noticeable account is revolving lines of credit that increased from 0 in 2002 to US$ 87 million in 2004, but later decreased to US$ 72 million in May 2004. Long-term debt, net of current portion also increased to US$ 49.9 million in 2002, and then decreased

Debt to equity ratio is now 1.50, compared to 2.49 (showing less debt compared to equity)