Krispy Kreme Doughnuts, Inc

Krispy Kreme Doughnuts, Inc. FIN 5201 2M Case in Corporate Finance nick: Tuesday 1pm-4pm Instructor: Steve Ng Krispy Kreme Doughnuts, Inc. Krispy Kreme Doughnuts (KKD) is one and only(a) of the most popular brands of doughnuts in the linked States. The association built doughnut frequents that offered customers the unique have of sightedness the doughnuts being made while they were in the shop astound the product. As the company grew in popularity, it proceeded to expand at a rapid rate. In April 2000, the CEO, Scott Livengood, took the company public and it had one of the largest initial public offerings (IPO) at that period. After a a couple of(prenominal) eld of success, however, the company ran into serious troubles. On May twenty-fifth of 2003, the rampart Street Journal published a write up on Krispy Kreme (KKD) that tarnished their re postation. The article described the questionable explanation practices that the company employ when recording the purchase of struggling stores they franchised in the state of Michigan. The franchised stores owed the company several million dollars for equipment and interest. The article revealed that KKD schedule the purchase be as an intangible asset and failed to powerful account for amortisation expenses.

Typically, the be treatment for reacquired franchise rights is to pay off the value of the science over its legal life. The aggressive accounting practices of the company triggered the U.S. Securities and supplant Commission (SEC) to investigate KDD in January of 2005. KKDs Board of Directors inflexible to restate the financial pedag ogy to fructify previous errors. However, t! he misfortune to provide the new financial statement on time damaged the reputation of the company so far further. The companys shares fell below $10 a share and it put itself at risk of paying credit-facility default and being delisted from the upstart York Stock Exchange (NYSE). The bad promotion KKD got because of the accounting stain did contribute to the drop of stock...If you want to get a climb essay, order it on our website: BestEssayCheap.com

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