Liquidity Ratio
1.0 Introduction
Krispy Kreme Doughnuts starts the company business with a high reputation, good business prospective of growing industry and a high-ranking brand. As one of the hottest brand in America, the Hot Doughnut concept, it was a new popular and innovation idea brought the company performance to the top of the hills. However, the company management had faced with some failure and problem in their financial status and fundamentals. It leads to the stock price and the expectation plummeted. Consequently, the business was languished in the Doughnuts industry.
In this case study, our main purpose is to analyze the company financial statements and investigate the effects of financial analysis announcements on the stock price from 2000 to 2004. Besides that, we concerned about the financial management or strategy in the company and how are they sustaining their company growth and expected earnings in the stock market. We also discuss about the company financial analysis and competition in the industry.
2.0 Case Study Summary
Krispy Kreme Doughnut operation was started in 1937 when the founder of Kripsy Kreme, Vernon Rudolph began making doughnuts from a special recipe he bought from a French chef. Then, Krispy Kreme was so well-known and it expanded from a wholesale enterprise to an addition of Krispy Kreme’s retail operations and franchising. Rudolph focused on excellent quality of doughnuts and customer service. The result was always good when it was under the control of Rudolph. After Rudolph’s death, Krispy Kreme was acquired by Beatrice Foods and its priority was to earn profit. Beatrice encouraged additions to the menu and changed the original recipe and logo of Krispy Kreme to cut cost. Unfortunately, the business went down Beatrice decided to sell it. In 1982, the new owner of Krispy Kreme, Joseph McAleer bought Krispy Kreme by using leverage. Joseph maintained back the original logo and recipe of Krispy Kreme. One of the priorities of Joseph and
Krispy Kreme Doughnuts starts the company business with a high reputation, good business prospective of growing industry and a high-ranking brand. As one of the hottest brand in America, the Hot Doughnut concept, it was a new popular and innovation idea brought the company performance to the top of the hills. However, the company management had faced with some failure and problem in their financial status and fundamentals. It leads to the stock price and the expectation plummeted. Consequently, the business was languished in the Doughnuts industry.
In this case study, our main purpose is to analyze the company financial statements and investigate the effects of financial analysis announcements on the stock price from 2000 to 2004. Besides that, we concerned about the financial management or strategy in the company and how are they sustaining their company growth and expected earnings in the stock market. We also discuss about the company financial analysis and competition in the industry.
2.0 Case Study Summary
Krispy Kreme Doughnut operation was started in 1937 when the founder of Kripsy Kreme, Vernon Rudolph began making doughnuts from a special recipe he bought from a French chef. Then, Krispy Kreme was so well-known and it expanded from a wholesale enterprise to an addition of Krispy Kreme’s retail operations and franchising. Rudolph focused on excellent quality of doughnuts and customer service. The result was always good when it was under the control of Rudolph. After Rudolph’s death, Krispy Kreme was acquired by Beatrice Foods and its priority was to earn profit. Beatrice encouraged additions to the menu and changed the original recipe and logo of Krispy Kreme to cut cost. Unfortunately, the business went down Beatrice decided to sell it. In 1982, the new owner of Krispy Kreme, Joseph McAleer bought Krispy Kreme by using leverage. Joseph maintained back the original logo and recipe of Krispy Kreme. One of the priorities of Joseph and
References: Arthur, K. J., & Martin, J. D. (2005). Financial Management : Principles and Applications. New Jersey: Pearson Education. Nordin, S., Zawawi, S. A., Ismail, R., & Ramli, K. A. (2011). Financial Management. Petaling Jaya: Person. Ross, S. A., Westerfield, W. R., & Jaffe, J. (2010). Corporate Finance : Ninth Edition. New York: McGraw Hill.