The Health of Krispy Kreme

The health of Krispy Kreme

Dawn Patten

ACC/226 Managerial Accounting

11/25/07

The health of Krispy Kreme

There are five different analyses used to determine the health of a Krispy Kreme such as depreciation analysis, company stock analysis, cash flow statement analysis, income statement trend analysis, and management analysis. With using these five analyses we will look at the financial health of Krispy Kreme Doughnuts, Inc through selected financial statement information from the year 2001 to 2003.

Krispy Kreme uses the straight line method when depreciating their property, plant, and equipment over an estimated useful life. As of February 2, 2003 and February 3, 2002 they have approximately 50% of their property, plant, and equipment left to be depreciated. The building is estimated between 15 to 35 years and the machinery and equipment is estimated between 3 to 15 years by averaging lesser then the useful lives of the assets or lease term.

Krispy Kreme Doughnuts Shinjuku, Tokyo

English: Krispy Kreme delivery truck.

An assortment of doughnuts on display in a shop in...

Their Intangible assets are no longer amortized since the Financial Accounting Board issued new standards that took effect on June 30, 2001, but if they were purchased before this date they are reviewed annually for impairment. At the end of the fiscal year in 2002, Krispy Kreme recorded an expense to amortize their intangible assets related to a purchase before June 30, 2001. They also completed an impairment analyses on its intangible assets for year end February 2, 2003 and had no instances of impairment.

Krispy Kreme's property and equipment net went from $112,577 to $202,558, which increased by $89,981 by the ended February 2, 2003, but only $83,196 through investment activities. With a total asset turnover of 1.20% which is $491,540 / $410,487 for year ended February 2, 2003.

Krispy Kreme issued 10,000 shares with a no par value preferred...