[FIN 482: CASE STUDIES IN FINANCIAL MANAGEMENT: CHITRANGNA
CHAUDHARY ROOSEVELT ID 900336721] November 06, 2015
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 annual growth of Krispy Kreme donuts from Jan 2000 through Feb 2004 have been quite consistent. The income growth from 1999 2003 has more than 10 folds. However the equity has been increasing in negative numbers from 2001 continuously form the last four years.
The reason for this might be the development of business in other aspects is not developing and growing as much as otherwise which of course has impacted the company's income. In the balance sheets of Krispy Kreme donuts of the assets look really good from Jan 2000 to
2004 however there are a few facts that were noted which are as follow:
1. Cash and cash equivalents between defeated off between 2003 and 2004 had dropped considerably; 2. Assets held for sale in February 2004 were almost 37 million and change the company did not amortize their re-acquired franchise rights, goodwill and other intangible assets it was overstated asset in 2000 to 2003 and therefore there was a dramatic increase from 49 to
175 million respectively;
3. Total assets and shareholders were impressive but if you really break down the components they were not so good. In 2004 short-term debt and the credit line work zero but the long long-term and credit line increased from 7.2 million in 2003 to 87 million in
2004. And the long-term debt, net of current percent increased to 49.9 million in 2003 and the decreased by about a million in 2004;
4. The shareholders equity percent had a dramatic jump from 173 million in 2000 to 294 million in 2004. The reason clearly was the rapid growth as