This website uses cookies to ensure you have the best experience. Learn more

Krispy Krème Doughnuts. A Harvard Business School Finance Case Study

734 words - 3 pages

Krispy Krème DoughnutsObjective:To develop an investment recommendation for Krispy Krème Doughnuts and conclude whether they should go ahead with their on going expansion strategy or not.To achieve this objective, historical financial statements will have to be analyzed and an assessment of the future financial health of the firm be made.Based on the case, it is evident that Krispy Krème Doughnuts opened to the public with a boom, with its share prices rising form $5.5 to $9.25 in just one day. The increments in the value of their shares are commendable. However, now the issue faced by the company is whether Krispy Crème Doughnuts will be able to sustain this growth. The revenues form all sources, company stores, franchises and KKM&D need to be maximized.Krispy Crème Doughnuts is a comparatively young company and a good potential to grow further. With just 222 stores by April 2002, it is already a ...view middle of the document...

P/E Ratio is very high thus indicating the health of the company is very good.The Investment Utilization Ratios have also been almost constant throughout. The Investments have been utilized well and the company is working under normal operations and is not suffering with any problems.The company has high profit margins hence better sustainability.The financial ratios are an indication of a good financial leverage which is again a sign of efficient operations.Control of Franchises:However, there seems to be a problem with the control of their franchises. It can be seen from exhibit 1, fig 2, that the returns at the franchise stores are less than the returns from the company owned stores (though it has gone down from 45% to 26%), the manager should probe into why this is happening. The machines are provided by the company and so is the dough; then what could be the reason for lower sales?Recommendation:The Company should go ahead with its trend of expansion. The market is receptive and the potential is huge. Being a young company they have greater number of markets to venture into and more ideas to implement.With their good operations and policies:- Having a vertically integrated management and providing the manufacturing plant and the dough, they can keep a check on the quality of their products and hence, have an upper over their competition which is a fragmented market. Besides, they have a delivery system operating under KKM&D which results not only in quality checks but timely delivery and a source of revenue as well. Selling the machinery through the same company is also a higher margin business.However, apart from going into further expansion, they should try and probe into the reasons why the sales from the franchise operated stores are below those of the company. They need to have a right balance between their three sources of revenues and knowing the implications of each is important.Last but not the least, looking at their financial statements it can be concluded that to satisfy their monetary requirements, they can raise the funds through a combination of both, stock offerings as well as through debt financing.

Other Essays On Krispy Krème Doughnuts. A Harvard Business School Finance Case Study

Destination Image: Image Problem Of Turkey As A Case Study

7342 words - 30 pages destinations. In this case, to be successfully promoted in targeted market, a destination must be favourably differentiated from its competition and has strong image to be positioned in the mind of the tourists (Echtner and Ritchie, 2003). Thus, destination image play an important role in making the tourism destination viable for long-term tourism business.2. The Issue of Meaning and Measurement of Destination ImageTourists today have to be enticed since

Normal Case Study. About A Used Car Deal Gone Bad. Canadian Law Courts

770 words - 4 pages the parties is rescinded. The defendant shall return the plaintiff's money and the plaintiff shall return the Mercedes to the defendants. Also an extra $350 was awarded for work done on the car during the brief ownership by the plaintiff.Does the case make new law or did the judge apply existing law to the facts in the case?The judge applied existing laws. He used the Licensing of Trades and Business Act as a reference for the case.If the case

Critical Thinking And Decision Making. Let It Pour: A Critical Thinking Case Study

1375 words - 6 pages ensure that the changes are working appropriately and that all parties involved are following them and to address any issues that were raised during the problem-solving actions.When addressing the first major concern contained within the case study, the hospital needs to have the staff follow and uphold company policy. The organization has implemented rules, regulations, a mission statement, and various other policies to protect employees and

Communication Case Study Analysis: There's A Syringe In My Pepsi Can! - MKT438

1797 words - 8 pages Effective communication between an organization and its publics is key component of crisis management. Organizations must see the importance of releasing the right information to both internal and external publics to minimize negative publicity and negative public reaction. In today's marketplace organizations have to make a concerted effort to manage a crisis situation or inevitably the media will. A crisis such as the Pepsi Case Study: There's

Case Study Essay - Stem cell Research : Students were asked to read and respond to a controversial issue raised by advances in modern biological sciences

555 words - 3 pages honestly, if we ever do allow that kind of research, we will save millions of lives. Not to mention putting the whole pharmaceutical industry out of business, because of all the newly developed treatments we will be discovering. I can keep going on about the facts that stem cell research is in-fact important to the U.S citizens, and can help in many ways.The problem is that current stocks of stem cells have taken up a "non-human molecule" called N

A Study On The Internet Browsing Behavior Of Senior Filipino High School Students

2071 words - 9 pages computing tools present in the web.II.Social IssuesThe main issue we chose for our group is the browsing behavior of fourth year high school students and their purpose in using the web. The group would basically want to find out what these young individuals do online and how they use the internet as a viable source of information as well as a tool for entertainment and leisure.The group wants to see if what really do 4th year High School students of

Case Study: "Hospital Corporation Of America" By Kester, W. Carl

1844 words - 8 pages . Their spending pattern are shifting dramatically far from being saving and conservative, ie. among other things, they are longing for better health care services rather than how much does it costs.IV.References(1)Brealey, Richard A. and Stewart C. Myers, Principles of Corporate Finance, 7th edition (2004) Irwin/McGraw-Hill.(2)Kester, W. Carl, Case study: Hospital Corporation of America, Harvard Business School Publishing, Item Number 9-283-053.

Assignment Effective Teams

438 words - 2 pages Axia College MaterialAppendix MWeek Six AssignmentLocate the HBR Case Study: Into the Fray, using the University Library EBSCOhost major article database. Use the below search criteria to locate the case study.Title: Into the FrayReference: Peebles, M. Ellen, Widmann, Nancy Clifford, Kopelan, Amy Dorn, Hassan, Fred, Cohen, Allan, Rhodes, Gary B., Harvard Business Review, 00178012, Jan2005, Vol. 83, Issue 1.Database: Business Source Complete.Open

Facebook

2896 words - 12 pages as to how the social networking site started and the developments from the introduction until recently.I furthermore went on to evaluate the source of finance with a brief explanation as to what source of finance is and the different type of sources available to business i.e. Short term , medium term and long term. This explains the type of finance business need starting from day to day transactions to long term purchasing of assets and

Strategic Management In Nucor

7576 words - 31 pages Exploratory Study of their Use in Japan', Journal of Business Strategies, Vol. 24, No. 1.Arce, E. and Flynn, D. 1997, 'A Case Tool to Support Critical Success Factors Analysis in IT Planning and Requirements Determination,' Information and Software Technology, vol. 39, pp. 311-321.Barney, J.B., 1991, 'Firm resources and sustained competitive advantage', Journal of Management, vol. 17, pp. 101.Barney, JB 1995, 'Looking inside for competitive

Financial Distress Prediction Using Z-Score

5279 words - 22 pages of firms whose asset size exceeded $1 billion. In this environment, business leaders and finance professionals would be well advised to refresh their knowledge of bankruptcy prediction models. Fortunately, those models have been around for a while. The present paper is intended to serve as an introduction into one of the most popular bankruptcy prediction models, the Z-score model developed by Edward Altman in his pioneering 1968 paper.The

Similar Papers

Health South: A Case Study Of Business Ethics

1717 words - 7 pages Ethics in business has always been an issue. The business of business is a take-no-prisoners, dog-eat-dog world aspect of looking at things and with this being said at times ethics seem to go out the proverbial window. Over the years, with situations becoming more and more visible to the public, the U.S. government has had to step in and take some actions. These actions came in the form of the Sarbanes-Oxley Act of 2002 which defined a lot of

A Case Study Analysis

1524 words - 7 pages ZAP!!, A Case Study AnalysisZAP!! needs to be zapped. ZAP!! has a problem that will not go away. ZAP!! management has implemented a new manufacturing quality control system and would like full employee participation. However, not all employees (assemblers) participate in the weekly quality control meetings and those who do are reluctant to address the issues or express their views. ZAP!! management does not want to terminate any of the

A Report On Case Study Analysis

2151 words - 9 pages This case study report is requested by Dr xxx, the lecture of managing communications technology in xxx University . The case study comes from course study guide of managing communications technology (2008). This report is due on 05th of May, 2008.1.2Company backgroundTwo companies, Gretham Young (GY) and Jameson Business Systems (JBS) formalized their relationship and became a new company which is named Gretham Jameson Consulting (GJC). The new

Ls Group (A) Case Study Solutions

1128 words - 5 pages LS Group Case(a) For LS Group, what specific reasons were presented to justify the ERP implementation project? Did these reasons warrant an ERP implementation project?Reasons:1) LSG currently uses an information system, which is outdated and slow. Furthermore, it is not compatible which makes communication impossible. Hence, transmitting data is time consuming and required a lot of manpower as the staff was required to reenter data into each