Krispy Kreme Doughnuts, Inc

Krispy Kreme Doughnuts, Inc. FIN 5201 2M Case in Corporate Finance dishonor: Tuesday 1pm-4pm Instructor: Steve Ng Krispy Kreme Doughnuts, Inc. Krispy Kreme Doughnuts (KKD) is superstar of the most popular brands of doughnuts in the linked States. The association built doughnut shop classs that offered customers the unique escort of sightedness the doughnuts being made while they were in the shop squeeze 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 some eld of success, however, the company ran into serious troubles. On May twenty-fifth of 2003, the rampart Street Journal published a account bid on Krispy Kreme (KKD) that tarnished their re postation. The article described the questionable news report practices that the company employ when recording the purchas e 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 the right way account for amortisation expenses.

Typically, the news report treatment for reacquired franchise rights is to liquidate 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 statement to wane previous errors. However, the mi sfortune to provide the new financial statem! ent on time damaged the reputation of the company regular further. The companys shares fell below $10 a share and it put itself at risk of paying credit-facility heedlessness and being delisted from the upstart York Stock Exchange (NYSE). The bad packaging 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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