Krispy Kreme Doughnuts‚ Inc. (hereinafter‚ “Krispy Kreme”) seemed poised to become an industry leader and Wall Street chart topper in 2000‚ however‚ by 2004 the company’s stock price had plummeted. Krispy Kreme’s stock price one day after the initial public offering in April of 2000‚ was $40.63‚ giving the company a market capitalization of nearly $500 million. Investors believed Krispy Kreme was the next big money maker to enter the market. By 2005‚ Krispy Kreme shares were trading at less than
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oughnuts Case #7 Krispy Kreme Doughnuts‚ Inc. [pic] FNCE 4620 - Financial Analysis and Policy Dr. Gregory Group 1 Chris Suggs Alex Stephens Florian Fourmanoy Jonathan Colangione Table of Contents 1. Executive Summary 2. Problem Statement 3. Data Analysis 4. Key Decision Criteria 5. Alternatives Analysis 6. Recommendations 7. Action and Implementation Plan 1. Executive Summary: Krispy Kreme Doughnuts was a successful privately owned
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Krispy Kreme began in 1937 when Vernon Rudolph opened his first doughnut shop in Winston-Salem‚ North Carolina. The name was invented to represent the crispy outside of the doughnuts and the soft‚ creamy middle. Based upon a recipe he bought in 1937 from a French chef‚ the original glazed doughnuts remain unchanged over the years. The recipe is locked in a fireproof vault at the company’s headquarters to this day! A typical Krispy Kreme store turns out more than 3‚000 doughnuts an hour. A large
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Krispy Kreme Financial Health Analysis ACC 226 Depreciation Analysis: Depreciation is the term used for the decline of an object value over time. Krispy Kreme’s depreciation is calculated using the straight line method. Benefits from asset are more likely to be constant over its live‚ thus making straight line method of depreciation more appropriate as it results in a constant annual depreciation change. Krispy Kreme uses SFAS-142 for accounting of intangible assets. Per this
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Case Study in Corporate Finance Krispy Kreme Doughnuts‚ Inc. Presented by – Group A2 Timeline Krispy Kreme Doughnuts‚ Inc. Ratio Analysis Liquidity Ratios As shown in Exhibit 1‚ quick ratio for Krispy Kreme gradually rose from 1.05 to 2.72‚ during 2000 to 2004. And current ratio changed with the similar pattern. Generally‚ a quick ratio of 1 is considered good in most industries. As for Krispy Kreme‚ the quick ratio is always higher than 1‚ and the highest point is 3.25 in 2004. This means
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law changes. Krispy Kreme train their staff who usually have little experience or education; consequently‚ they pay employees minimum wage or similar and are therefore affected by minimum wage increases. Other political factors are government actions to reduce obesity; however it is very unlikely that government will legislate against high fat and unhealthy foods 2 . 3.2.2 Economic The continued economic downturn has meant tightened consumer spending‚ as Krispy Kreme is a non-essential
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INTRODUCTION The Krispy Kreme‚ Inc. case investigates the contributing factors that caused this particular darling of Wall Street’s stock to suddenly plummet more than 80% in 2004. In the year 2000‚ Krispy Kreme went to public and boasts iconic status by became the hottest brand in America. Less than a year after its initial public offering‚ the company’s shares were selling for 62 times earnings. However‚ in 2004 the market was shocked by the company’s stocks that plummeted more than
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To: Investors of Krispy Kreme Doughnuts From: Financial consultant Date: January 2005 Subject: Warning signals from Krispy Kreme Doughnuts Historical income statements show that the revenues and net income increased continuously from 2000 to 2004. The first warning signal observed was net loss in May 2004. By comparing income statement in May 2003 with income statement in May 2004‚ the revenue increased 24 percent‚ but net income appeared negative. Krispy Kreme spent $40 million in
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Krispy Kreme Doughnuts‚ as discussed in Darden Business Publishing Case UVA-F-1479‚ appears to be at a crossroads. After years of astronomical growth‚ the company find its share price plummeting in the midst of discoveries about faulty accounting practices. The following paper examines several issues behind the sudden decline First‚ the historical income statements and balance sheets are examined to determine the financial health and current condition of the company. This is followed by an analysis
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SWOT ANALYSIS STRENGTHS-S 1. Krispy Kreme makes it possible for different organizations throughout the community to use there product as a fundraiser. 2. Krispy Kreme is most popular in grocery and convenience stores which gives customers easy access to the product. 3. Employees are better trained. 4. KKD has a unique brand and variety of freshly made donuts. 5. KKD can offer to have customers watch product being made at the donut theater. 6. KKD has a high capacity to
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