Krispy Kreme Doughnuts, Inc.
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 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
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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.
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
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
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.
Krispy Kreme is an organization that regardless of its history which going back to 1937, recently encounter quickly expanding of company-owned and franchises, Krispy Kreme has also been affected by the recent trend of customers’ health habits. Customers demand a low-carb doughnuts, which this has affected their sales, and management control to find different that worked for the company to stay ahead on the competition.
What can the historical income statements (case Exhibit 1) and balance sheets (case Exhibit 2) tell you about the financial health and condition of Krispy Kreme Doughnuts, Inc.?
Krispy Kreme Doughnuts (KKD), a once high flying growth stock has been hampered as of late with shareholder lawsuits. When sales growth and earnings began to drop significantly in 2003, the company blamed its problems on the popularity of low-carbohydrate diets like Atkins and South Beach at the time. But the SEC began probing Krispy Kreme's accounting for franchise buybacks and is now facing shareholder lawsuits for inflating profits. Senior management officials allegedly knew of the problems, but continued to pad sales figures by doubling doughnut shipments to wholesale customers at the end of fiscal quarters, according to
Is Krispy Kreme financially “healthy”? What do the statement show, what do the ratio show?
The company's financial ratios for 2004, 2005, and 2006 were analyzed and indicates that the company is not without problems.
Part I deals with assessing the financial performance of the firm. For this section you need to able to understand why Clarkson Company is so short of funds despite its record of profitable operations and, in this connection, develop the distinction between profits and cash requirements. An important contribution in this part is to emphasize the dichotomy between accounting income and cash requirements.
1. In the beginning, how was Starbucks different from other coffee options for coffee drinkers in the United States? What activities and assets did Starbucks leverage to differentiate itself from competitors?
QUESTION 6: GIVEN YOUR ASSESSMENT OF KRISPY KREME 'S HEALTH, WHY DID IT 'S STOCK PRICE DROP BY 80% BETWEEN 2003 AND 2004?
The US economy is currently recovering from a recession. Despite the poor economic conditions, Krispy Kreme managed to grow 15% in 2001 with $394 million in revenues ending the fiscal year (2/3/02). 10 Krispy Kreme however is in a low cost industry therefore the rise and
Growth of Krispy Kreme- Grew to Rapidly which potentially could have hurt them. They had certain requirements for anyone that was coming on board with their product.
Due to its own internal investigation and the Securities Exchange Commission, Krispy Kreme announced it would be delayed in filing their financial reports due to their financial restatement the noted risks occur. Having to delay their financial reports, Krispy Kreme faces the risk facing to default on a $150 million credit facility. If they default, Krispy Kreme’s credit facility would be ended and they would be forced by their various banks to repay any and all outstanding balances. With their stocks trading at under $10 a share, the issue of financial restatement, and the risk of default has caused Krispy Kreme’s stock to be on the verge being eliminated from the New York Stock
Krispy Kreme went from being a wholesale baker to a specialty retailer. They used their marketing skills by stressing the ¡§hot doughnut experience¡¨ that customers knew them by. It was known that by changing the company¡¦s traditions and style as was done when Beatrice Foods took over in the 1970¡¦s that customers do not take a liking to change. Krispy Kreme knows that they always have to look to see what the customers want and appeal to them. Krispy Kreme spends very little on advertising. They rely on word of mouth of their customers, local media publicity, and product giveaways.
As you know Thailand has many brand of donut and last year have new brand come to Thailand it is Krispy Kreme Doughnut. First time that they promote everyone interesting and exciting about that. Now it not interesting like beginning period. So, our group would like to study about customer preference and want to know about customer satisfaction with price, place, taste and location of Krispy Kreme Doughnut.