Krispy Kreme

From the historical income statement and balance sheet, we notice that, from 2000 to 2004, the KK grew very fast and its net income increased substantially. For example, form 2003 to 2004, KK’s net income increased by 71%. In turn, the company experienced an increasing EPS which was rose from 0.15 to 0.92, and the price of company’s share jumped up by 120%. The historical income statement indicates that Krispy Kreme has a

Since the Walgreen Company sells products as the retailer or manufacturer it may find the cost of its products increases or rises high the company should use the LIFO method of inventory (Porter & Norton, 2013). According to Hughes and Schwartz (2014), the use of LIFO method of inventory helps a company buys or sells will less taxable income and less income tax payments than FIFO. Porter and Norton also found that when the prices are rising frequently, then a company should use the LIFO method. Therefore, the Walgreen Company uses the Last-In, First-Out (LIFO) Method. It is also equally important that the Walgreen Company should use the LIFO method of Inventory costing because the cost of last accrued items should be assigned firs tot sales

35. What method does it use to value Inventory? – Inventories are stated at the lower of cost or market, with cost determined on an average-cost basis.

The Board is currently proposing a new simplified guidance on the measurement of inventory. The Board suggests that inventory should be measured at the lower of cost and net realizable value, eliminating the old guidance of measuring inventories. The Board defined net realizable value in ASC paragraph 330-10-20 as “Estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” The new guidance should help companies to disclose the measurement of inventory more concisely and reduce the cost to account for them. In addition to that proposal, the Board are also aligning with the measurement of inventory with International Financial Reporting Standard. According to IFRS No. 2, inventories are required to be measured at the lower of cost and net realizable value. IAS No. 2 defined net realizable value as “the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.” This definition is aligning with the definition under

Can you picture “riding down the street then you look over to see the big red” “hot and ready “sign on for those delicious little glazed donuts, and you just have to stop in for a dozen but when you get in there you end up buying two dozen. Trust me, I always do. Krispy Kreme is the best donuts in the world to me and they just melt in your mouth. Before you know it you will have ate a whole entire box by yourself. Krispy Kreme Doughnuts, is one of the world 's driving retailers and wholesalers of doughnuts and bundled desserts. They were very successful when they first started up but like any other company they also had downfalls. The Krispy Kreme grow so reckless that they almost had to file bankrupt and close some of their profitable stores.

During periods of sharp price movements, LIFO has a stabilizing effect upon reported income figures because it eliminates paper income and losses on inventory and smooths the impact of income taxes. LIFO opponents object to the method principally because the inventory valuation reported in the balance sheet could be seriously misleading. The profit figures can be artificially influenced by management through contracting or expanding inventory quantities. Temporary involuntary depletion of LIFO inventories would distort current income by the previously unrecog-nized price gains or losses applicable to the inventory reduction.

For analysis sake, the transition from LIFO to FIFO method helps one to evaluate the up-to-date costs of inventories and debt paying capabilities as well as portraying their uninflated inventory turnover values (Subramanyam, 2014). Additionally, since inventories often represent significant percentages of a company’s assets and inflation leads to price increases overtime, LIFO to FIFO restatements can allow analysts to compare companies with different inventory valuation methods (Investopedia, 2016c). More specifically, investors can assess each method’s short and long-term effects on values such as tax expense and net income (affecting earnings

1.0 INTRODUCTION The statutory mandate in U.S. tax law that firms using the last-in first-out (LIFO) inventory costing method for tax purposes must also use LIFO for financial reporting purposes makes inventory accounting an especially interesting research and teaching topic. The constraint on managerial discretion imposed by tax--book conformity

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).

QUESTION 6: GIVEN YOUR ASSESSMENT OF KRISPY KREME 'S HEALTH, WHY DID IT 'S STOCK PRICE DROP BY 80% BETWEEN 2003 AND 2004?

Ever since I was about four years old I have had an obsession with one type of fast food: Krispy Kreme. This obsession goes back to before I can even remember everything growing up. According to my grandmother, whenever we drove by a Krispy Kreme when I was about four, I would yell the word "doughnut" after seeing the big red circle sign with the words saying hot Krispy Kreme doughnuts now. And that is where it all started for me and my favorite type of sweet junk food. Krispy Kreme, in particular, has had a large influence on my growing up. I am also, however, very passionate about American doughnuts. Most kids were passionate about hot dogs, pizza, popcorn, or ice cream; but I was never interested in those type of goodies. There has always been something that is completely irresistible to me about a good ole sweet glazed or fill doughnut and some hot chocolate .I am not sure if it is the way the chocolate iced glazed with sprinkles doughnut that caught my eye and attention or the way the original glazed doughnut smelted in my little mouth. Whatever it is, I have been hooked from what seems like birth.

Krispy Kreme Doughnuts, Inc. is a specialty retailer of doughnuts. The company 's business owns and franchises Krispy Kreme doughnut stores, where it makes and sells over 20 varieties of doughnuts, including its signature Hot Original Glazed and nine other varieties. Each of its stores is a doughnut factory with the capacity to produce from 4,000 dozen to over 10,000 dozen doughnuts daily. The Company also sells in its stores drip coffee, other beverages, other bakery items and collectible memorabilia such as tee shirts, sweatshirts and hats. As of February 2, 2003, there were 276 Krispy Kreme stores, of which 270 were located in 37 states in the continental U.S., five were located in eastern Canada and one was

Krispy Kreme was founded in 1937 by Vernon Rudolph of Winston- Salem, North Carolina. He purchased a secret yeast raised doughnut recipe from a French chef in New Orleans. He started by delivering doughnuts to local grocery stores. When Rudolph died in 1976 Beatrice Foods took over. Due to the change in recipe and management problems the company was bought again in 1982 by a group of Franchisees. From this point Krispy Kreme target was to grow.

After becoming CEO, president, and chairman of the board in 1999, the company repositioned and focused on being a specialty retailer rather than a wholesale bakery. Krispy Kreme wanted to give their customers the “hot doughnut experience” they all knew and loved (Peter & Donnelly, 2011). The second part of their plan was to increase the number of stores both franchises, and company owned nationally. The company began to move into other regions. For example, in 1996 the first store in NY City was opened, and in 1999 the first store in California opened. In early 2000, the company went public and merged into a new company called Krispy Kreme Doughnuts, Inc., instead of Krispy Kreme Doughnut Corporation. From 2000-2004, the number of stores has proliferated from 144 to 357 and Krispy Kreme is now beginning to open in international locations, opening the first factory in London. They now also have locations in Canada, Mexico, and Australia.

Some of the main provisions of ASU 2011-15 are that “An entity should measure inventory … at the lower of cost and net realizable value,” and “Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method”