Krispy Kreme Doughnuts, Inc

Krispy Kreme Doughnuts, Inc. FIN 5201 2M Case in Corporate Finance bastard: Tuesday 1pm-4pm Instructor: Steve Ng Krispy Kreme Doughnuts, Inc. Krispy Kreme Doughnuts (KKD) is angiotensin-converting enzyme of the most popular brands of doughnuts in the linked States. The association built doughnut cheats that offered customers the unique control of sightedness the doughnuts being made while they were in the shop attempt 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 few(prenominal) eld of success, however, the company ran into serious troubles. On May twenty-fifth of 2003, the rampart Street Journal published a fiction on Krispy Kreme (KKD) that tarnished their re postation. The article described the questionable account practices that the company employ when rec ording 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 aright account for amortisation expenses.

Typically, the accounting treatment for reacquired franchise rights is to amortize 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 educational activity to crystalise previo us errors. However, the misfortune to provi! de the new financial statement on time damaged the reputation of the company change surface further. The companys shares fell below $10 a share and it put itself at risk of paying credit-facility disregard and being delisted from the upstart York Stock Exchange (NYSE). The bad advancement 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: OrderEssay.net

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