FIN 4596 Fall 2019
Guidelines for financial ratio analysis in Krispy Kreme Case
The Krispy Kreme case analysis (done individually) focuses on financial ratio analysis and
financial statement analysis for a firm that expanded too quickly which consequently hurts its
financial health.
Possible Questions to Discuss:
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 KK Doughnuts?
2. How can financial ratios extend your understanding of financial statements? What
questions do the time series of ratios in exhibits in case Exhibit 7 raise? What questions
do the ratios on peer firms in case Exhibits 8 and 9 raise?
3. Is Krispy Kreme financially healthy at year-end 2004?
4. Considering your answer to question 3, what accounts for the firm’s recent share price
decline?
5. What is the source of intrinsic investment value in this company? Does this source appear
on the financial statement?
Guidelines for Executive Summary in Krispy Kreme Case
The Executive Summary submission should begin with a cover page with your name, the
title (that specifies the type of document, the name of the company, and the financial issue
explores), and then continue with the main body TWO-page with the key issue(s) at hand and your
recommended solution to that problem(s). Remember to focus and to be as clear and concise
as possible in describing the problem, the results, and the solution; the goal is to help senior
managers make a more informed decision moving forward.
The Executive Summary (main body) should be TWO-page long document (standard
margin, 12-point font), internally consistent, and free of spelling, sentence structure, or factual
errors. The analysis should be written in paragraphs, not numbered bullets responding to some or
all discussion questions. Please insert page numbers and use subheadings as needed for clarity,
flow and organization.
Please keep in mind that you are supposed to report to senior executive(s) within the firm
who knows the history of the firm but may not be very familiar with finance. Do not review
background known to them and Write clearly in a non-technical way so that any bright firm
executive will understand the problem quickly and your recommended response to that problem.