Liquidity Ratio Essay

In this case study, our main habit is to analyze the party financial statements and check out the effects of financial depth psychology resolves on the subscriber line price from 2000 to 2004. Besides that, we concerned about the financial management or strategy in the company and how argon they sustaining their company growth and expected mesh in the stock market. We in like manner debate about the company financial analysis and competition in the industry. 2. 0Case Study abridgment Krispy Kreme Doughnut operation was started in 1937 when the commit of Kripsy Kreme, Vernon Rudolph began making doughnuts from a special convention he bought from a French chef.Then, Krispy Kreme was so well-know and it expanded from a wholesale enterprise to an addition of Krispy Kremes sell operations and franchising. Rudolph focused on superior quality of doughnuts and customer service. The result was forever and a day good when it was under the control of Rudolph. after Rudolphs death , Krispy Kreme was acquired by Beatrice Foods and its priority was to solve profit. Beatrice encouraged additions to the wit and changed the original rule and logo of Krispy Kreme to cut equal. Unfortunately, the business went plenty Beatrice decided to sell it.In 1982, the naked owner of Krispy Kreme, Joseph McAleer bought Krispy Kreme by using leverage. Joseph hold back the original logo and convention of Krispy Kreme. One of the priorities of Joseph and Krispy Kreme focused on blistering and fresh doughnut. In 1989, Kripsy Kreme was free from debt and began to expand. In 1996, doughnuts and added branded coffee were their main focus. In year 2000, Kripsy Kreme went public and the initial shell out price reached $40. 63. After going public, the toilet was planning aggressively to increase the modus operandi of line of descents and enter international markets. The revenues of Krispy Kreme Doughnuts were generated from n-premises sales, off-premises sales, manufacturing and distribution of crossroad mix and machinery and franchise royalties and fees. In whitethorn 2004, Krispy Kreme announced threesome major unfavourable results for the first time as a public company. Firstly, the company suffered loss ascribable to the trend of low-carbohydrate diet. Secondly, it mean to divest metric ton Mills and would be charged. Thirdly, the company planned to close three of its newborn hottish Doughnut and Coffee Shops. These announcements do the shargons disagreeable down by 30%. In year 2003, SEC announced that Kripsy Kreme was besides aggressive in acquiring franchise.The be take in of Krispy Kreme acquiring Michigan franchise was so wrong. The company recorded the interest income on past- cod loan from Michigan as prompt profit and the purchase cost on Michigan as intangible plus and did not pay off. In the aforesaid(prenominal) time, the company was being charged due to the quitting of the Michigans top executive. The shargons of Krispy Kr eme spend for an different 15% due to the announcement from SEC. SEC published another news report stated that Krispy Kreme was facing the problem of exploitation in addition fast and the company was too rely on the profits made from manufacturing and distribution of franchise equipment.Strengths Krispy Kreme is a well-established and large running company. It has a strong and ordered consumer base in joined carry and abroad.Krispy Kreme is a nationally well known consumer brand because the company offers product that is assist to none regarding on the taste, freshness and the finest ingredients. The company has consistent expansion and growth. Currently, the breadbasket has 395 stores with the strawman in 40 states in United State and in 16 hostile countries. Krispy Kreme gains the most popularity in grocery, convenience stores and retail outlets due to easy accessibility to the product. The corporation offers more than 20 different types of doughnuts and other menu item s including of coffee and bakery items.They are also selling those collectable memorabilia such(prenominal) as mugs, hats and toys. Besides that, Krispy Kreme introduced the neon fall guy of Hot Doughnuts Now because it offers variety of pertly made doughnuts with high quality everyday. Krispy Kreme is also the first corporation that cut a hole in its factorys wall to sell its fresh doughnuts now to the customers. Krispy Kreme is a vertically intergrated company with three business units which are company store operations, franchise operations and supply fibril operation. They produce doughnuts in a cost effective manner because of the using of an quicken approach.Thus, Krispy Kreme has a high capacity of mathematical product because each factory stores could produce 4000 twelve to 10000 dozen of doughnuts in a single day. In addition, Kripsy Kreme also distinguish itself with the others by offering customers an experience to compute the production of doughnuts. 3. 1. 2Weakne sses Krispy Kreme has the following weaknesses which is the low stock-take turnover ratio. If not attended to chop-chop the firms supply line will touch to cost more money and lop future profits. Next, the financial condition of Krispy Kreme is check compared to its competitors but does have some areas that contain improvement.Krispy Kremes young management is masking that they want to be alert and have employed an almost zero permissiveness policy regarding debt. Poor management or financial practices hurt reputation and stock prices of this company. Limited amount of healthy menu selections, limited non-breakfast menu items 3. 1. 3Opportunities International expansion gives better returns to company. Krispy Kreme can grab the demote to expand its business and enter into new markets like Asia countries because Asians love sweet goods and they are open to trying foreign foods. The popularity of Hesperian brands in these markets is quiet high.