The income statement’s total revenues doubled in two years due to their unusual growth. The problem to behind income statement and balance sheets stems from their company owned and franchised factories; instead of selling the donuts, the company sold machinery to make their products. The goodwill and required franchise rights doubled each year until 2004 which raised questions and concerns as to whether Krispy Kreme improperly implemented accounting treatments. Compared to the industry, Krispy Kreme was apparently a very high performing company, but we questioned the performance data. First problem we encountered were the current and quick ratios were unusually high due to the amount of cash, receivables and short term investments that Krispy Kreme held.
Dollar General in owned by Koldberg Kravis Roberts & Co. L.P (KKR) who own more than 79% of all shares in Dollar General. Some argue that part of the reason Dollar General has been so successful as of late is attributed to the economic crisis the United States experience during the second half of the 2000s. Economist believe that consumers will not shop at the Dollar General as much as the economy improves. In an effort to retain their existing customers and recruit new ones as the economy strengthens, Dollar General has begun to stock name brand items. Some analysts also believe that even when the economy improves, your average consumer will still look for ways to save money and continue to frequent the dollar discount stores.
During the company’s history from 1987-2006 they experienced above industry growth compared with most of their competitors. However, 2006 was the beginning of troubling times for FoldRite Furniture Company. (Wheelwright and Bellisario, 2012) It was discovered by management that high turnover rates in the manufacturing department lead to slower production and delivery times. These mistakes opened the door for competitors to take business away from the company. In any industry reliability and consistency are key factors to attracting and maintaining repeat customers.
WorldCom fraud Expense capitalization and Accrual expenses audit Description of audited area The Company’s problems started with the dot-com bubble burst and following reduced demand on infrastructure when it had the vast oversupply in telecommunications capacity. WorldCom increased its net income and assets by transferring part of its current expenses to capital account. By doing this, the expenses were understated and capitalized costs were treated as an investment. The Company managed to spread its expenses into the future and showed much higher net income in order to boost its financial performance. During that time the Company experienced troubles and the revenue has fallen while debt taken on to finance mergers and infrastructure investment remained the same.
2010) is provided below. 1167872 4 Despite the leading position and the good business results, SWOT shows several sources of potential risks for UST. The company is losing market share against new price-value competitors because of slow innovation and late product introduction and extensions. Historically, UST relied on his leading market position boosting earnings with annual prices increases. But in the meanwhile smaller competitors started to quickly erode market share with prices cut.
One of the reasons they think this is because debts can spiral out of control easily. For example a company named Payday Loans UK charges 1737% APR! So, say you borrowed £100 from Payday Loans UK over a month’s period. The interest they charge you is 1737%, you will end up paying £14475 back in just one month! (£100 * 1737% = £173700 / 12 = £14475) This is extortionate!
When looking at earnings per share, we can see that between May 2003 and August 2004 they issued more shares, probably because of their expansion. It appears they took on too much debt and tried to expand too quickly, based on their increase in interest expense and increase in debt. Looking at the balance sheet, in 2004 there were no more short-term investments, they probably expect accounts receivable to increase with growth in sales. This is probably because KK began to get desperate and turned their investments into cash. Concerning that notes receivable from affiliates is significant in 2004, problems with associates being able to cover cost of equipment and supplies.
The company knew that these customers’ usage was inconsistent and that they did not like the confusion current rates created. Customers wanted clear, flexible plans. They were unable to predict their own usage so they usually ended up paying more than they wanted to. Peak hour’s rates, extra minutes and one-time costs increased monthly bills unexpectedly. Pre paid plans were unusual because of prohibitive pricing (starting at 35 and as high as 75 cents) In 2001 mobile entertainment represented $10 billion and was projected to increase steadily over the next few years.
Laura Ashley is a global clothing and furnishings retailer based in the United Kingdom. They had grown at a very fast rate from operating 231 retail stores in 1986 to 481 stores in 1990. Unfortunately, its profits were not increasing as expected due to the inefficiency of its logistics management. Overall, it could be considered that the company grew too fast and without the infrastructure to support the growth. Information technology investment was also considered to lag behind the level that was required to initially support the growth and also to support the company in their ongoing global operations.
The firms stock has declined $2 per share over the last nine months but the firms profits have been rising. Shareholders normally receive what is called cash dividends and from the text the firm has never paid a dividend in 20 years. From what is written in the first paragraph, shareholders wealth is reducing during this time, and this shows that there is an agency problem. With the management team their actions show that pollution controls will show a profit maximization try, which means the managers are trying to maximize his or her salary, instead of the attempt to maximize shareholders wealth, the stock price. Evaluate the firms approach to pollution control.