This case involves the improperly represented earnings by Krispy Kreme Doughnuts, Inc. during the fourth quarter of fiscal year (FY) 2003 and each quarter of FY 2004. The company used improper accounting methods to avoid lowering its earnings during that period. Krispy Kreme also fraudulently reported its earnings per share (EPS) throughout that time, which exceeded the previously stated EPS by 1 percent. An agreement to settle the charges against Krispy Kreme was reached on March 4, 2009 when the Securities and Exchange Commission (SEC) issued a cease-and-desist order.
The SEC cited Krispy Kreme for three round-trip transactions, which involved the company paying money to a franchise with an understanding that the franchise would later repay the money in a planned method. This would allow Krispy Kreme to record extra pretax income in an amount that was nearly equal to the money that was initially paid to the franchisee. The first transaction resulted in additional net income of $365,000 after taxes. The second resulted in overstatement of $310,000 after taxes, while the third resulted in an overstatement of $361,000 after taxes.
Further accounting anomalies were discovered during the testimony of a former sales manager at a store in Ohio. A regional sales manager instructed that double orders would be sent out on the last Friday and Saturday of FY 2004 to increase the sales of Krispy Kreme in the fiscal year to meet the projections of Wall Street. The unneeded doughnuts
As the rising District Manager for the new Dunkin’ Donuts stores, many factors must be presented, analyzed, promoted, and executed. Opening new stores requires innovative ideas, being ahead of the game with the newest trends, and stabilizing the stores for the least amount of turnovers. Managing stores also means maintaining respect while coaching is vital. This requires feedback on both upward and downward channels of communication. For the purpose of this paper, Dunkin’ Donuts will be assessed and evaluated based on its job and organizational designs, criteria for recruiting and
When an error of overstatement like this one happens, the financial statements have to be restated in order(ed) to bring net income to the correct amount. The Cost of goods sold should’ve been increased by $8 million and the same
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.
Tootsie Roll Industries, Inc. has been successful in the manufacturing and sales of confectionery products since the year 1896. We maintain a diverse and notably recognizable brand portfolio that remains popular across all trade channels. We continue to maintain a conservative financial posture in the deployment and management of our assets. One of our company 's priorities is to keep the production and distribution facilities as efficient as possible, support evolving distribution patterns, improve quality and promote growing product lines. Moving forward, Tootsie Roll Industries, Inc. seeks to establish further itself as an industry leader and maintain its high level of satisfaction to its customers. Securing a loan would help to ensure goals are met and even exceeded. We have prepared a detailed package to ensure that all requirements are met to your satisfaction, to help ensure the securing of a loan.
As I climb the Hierarchy’s ladder with the rise of District Manager for the new Dunkin’ Donuts stores, several factors must be acknowledged, analyzed, promoted, and executed. Opening new stores requires innovative ideas, being ahead of the game with the newest trends, and stabilizing the stores for the least amount of turnovers. Managing stores also means maintaining respect while coaching is vital. This requires feedback on both upward and downward channels of communication. For the purpose of this paper, Dunkin’ Donuts will be assessed and evaluated based on its job and organizational designs, criteria for recruiting and selecting for optimal efficacy, and appropriately training and appraising employees.
In 1883 Bernard (Barney) Kroger invested 372 dollars that consisted of his life savings to open the first ‘Kroger’ grocery. That first store, located at 66 Pearl Street in downtown Cincinnati, would soon turn into the giant retail chain that consists of nearly 2,500 stores all over the country and most recently produced sales of over 76 billion dollars. Barney Kroger was revolutionary in the formation of the modern grocery, in that he was the first grocer to have his own bakery, as well as selling meat and other groceries all under one roof. Kroger was also the first to manufacture the products that he in turn sold in his own store. This was the beginning of what is today one of the largest food manufacturing companies in America.
The Kroger Company grew in 128 years from one store to over 3,500 stores of various banners and products. The Kroger Company is the largest food and drug retailer in the United States and is growing constantly with diversity in the retail market, dealing in food, pharmacies, apparel, jewelry and fuel. Kroger is governed by a 14 member Board of Directors including a Chief Executive Officer. Kroger is a leader in Corporate Social responsibility by maintaining environmental consciousness, social awareness and energy conservation awareness. Kroger is committed to customers, builds diversity and focuses on growth. The company operates a large part of it’s own manufacturing and distribution to increase profit
1. What can the historical income statements (case Exhibit 1) and balance sheets (case Exhibit 2) tell you about the financial health and current condition of Krispy Kreme Doughnuts, Inc.?
The Krispy Kreme Doughnuts case study solution solves the case on financial statement analysis. The structure of the solution is outlined below and answers the questions included in the outline
As Wall Street Journal stated, Krispy Kreme grew too quickly and diluted its cult status by selling its doughnut in too many outlets. They could not anticipate when the demand decreased due to low-carbohydrate diet trend issues. It can be seen clearly that interest expenses also increased for the year ended Feb 2, 2003 to the year ended Feb 1, 2004 as the debt increased.
Chhapon Mina Song (PR and Marketing Officer) is a PR major with a management minor at Utica College. She is knowledgeable about intercultural communications. She understands well about different expectations of customers from different cultures. With this knowledge, Song will be able to build the relationship between our franchising restaurant with the public bringing good image to our business. She is also passionate about public services and community work. She has helped organizing several fundraising events at her previous
The whole process throughput time of making a dozen of cookies is 26 minutes. It takes washing, mixing and spooning 8 minutes to make a dozen of cookies. And preparation and bake time totally are 10 minutes. The final step of cooling, packing and accepting payment of cookies takes roommate 8 minutes to finish the cycle. Assume the night capacity is 4 hours, so Kristen and roommate have 240 minutes operating time. Since the oven only holds one tray, the second dozen takes an additional 10 minutes to bake. For example, first dozen of cookies take 26 minutes to make, second dozen of cookies take 36 minutes to make and third dozen of cookies take 46 minutes to make. So we can
The bell chimes as I closed the door behind Shefali and me and entered Dance Innovations. After a long recital rehearsal and well-deserved Dunkin Donuts trip, my best friend and I returned, ready for performing group auditions. While I dreaded tryouts in general, I also oddly enjoyed the pressure and excitement of them. The upcoming two hours controlled the following year of my life, as it determined which groups I got into for the upcoming performance season. I sipped my Dunkin Donuts iced coffee, convinced the caffeine would ease my anxiety. I walked into the east studio, welcomed by dance bags and shoes scattered on the old wooden floor.
In 2003, the U.S. doughnut industry was a $5 - $6 billion market. American households consumed an estimated 10 -12 billion doughnuts annually; this translates into over three dozen doughnuts per capita. In 2002, doughnut industry sales rose by about 13%. Sales from doughnut outlets rose by about 9%, to approximately $3.6 billion, whereas packaged doughnut sales at supermarkets, convenience stores and other retail outlets staggered in the past five years. A study by Technomic confirmed the growth of doughnut shops and identified this segment as the fastest-growing dining category in the country. Further analysis provided by the following figure shows attractiveness and profitability
Table of Contents Introduction p.3 1. Company Overview p.3 2. Company’s mission and