...KRISPY KREME DOUGHNUTS, INC. Teaching Note Synopsis and Objectives Suggested complementary cases in financial statement analysis: “The Financial Detective, 2005,” (UVA-F-1486); “Deutsche Brauerei,” (UVA-F-1355); “The Battle for Value, 2004: FedEx Corp. vs. United Parcel Service, Inc.,” (UVA-F-1484) This case considers the sudden and very large drop in the market value of equity for Krispy Kreme Doughnuts, Inc., associated with a series of announcements made in 2004. Those announcements caused investors to revise their expectations about the future growth of Krispy Kreme, which had been one of the most rapidly growing American corporations in the new millennium. The task for the student is to evaluate the implications of those announcements and to assess the financial health of the company. This case is intended to be introductory as it can provide a first exercise in financial statement analysis and lay the foundation for two important financial themes: the concept of financial health, and the financial-economic definition of value and its determinants. Suggested Questions for Advance Assignment to Students 1. What can the historical income statements (case Exhibit 1) and balance sheets (case Exhibit 2) tell you about the financial health and current condition of Krispy Kreme Doughnuts, Inc.? 2. How can financial ratios extend your understanding of financial statements? What questions do the time series of ratios in case Exhibit...
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...1000 AB Bank Limited _____________________ Auditors’ report and consolidated financial statements for the year ended 31 December 2011 S. F. AHMED & CO Chartered Accountants House 25, Road 13A, Block D, Banani, Dhaka 1213, Bangladesh Telephones (880-2): PABX 989-4346 & 989-4258 Others 881-6467 & 881-5101 Fax (880-2): 882-5135 E-mails: (i) sfaco@citechco.net (ii) sfaco@sfahmedco.org Website: www.sfahmedco.org Auditors’ Report to the Shareholders of AB Bank Limited We have audited the accompanying consolidated financial statements of AB Bank Limited (“the Bank”) and its subsidiaries, namely, AB Investment Limited, AB Securities Limited, Cashlink Bangladesh Limited, AB International Finance Limited and AB Exchange (UK) Limited which comprise Consolidated Balance Sheet at 31 December 2011 and Consolidated Profit and Loss Statement, Consolidated Cash Flow Statement, Consolidated Statement of Changes in Equity and Liquidity Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards, and for such internal control as management considers necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud and error. Our responsibility is to express an opinion on these financial statements...
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... |Different sources of investment opportunities | |Financial Managers |Advantages and disadvantages of different source of finance | |Accountant |Historical financial information to forecast cash flows | |Investment Advisors | | |Marketing managers and responsible parties in Marketing department |Effective advertising methods to convince consumers about | | |the quality of the service to position the brand in | | |consumers’ mind | | |Competitors strategies and their success of attracting | | |consumers | 1.2. Importance of financial planning The financial planning starts with identification of total capital requirement. For this the finance managers make the sales forecast. Considering sales forecast, then organization requires deciding its production capacity which means the requirement of long term funds. If the production and...
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...Accounting and Finance Information Introduction Accounting is the foundation of business communication and thus, sometimes called the language of the business (Marshall, et al., 2003). Accounting is appropriate for people who are involved in economic activities in all segments of the society to develop knowledge, ability or competencies in understanding the fundamental of this language to be able to make decisions and informed judgments about those economic activities (Marshall, et al., 2003). Accounting and Finance complements each other in strategic business decision-making process and enhance individual economic planning. Accounting identifies measures and communicates economic information about an entity for the purpose of making decision and informed judgment (Marshall, et al., 2003). Users of accounting information include investors, stakeholders and other interested member of the public. The art and science of money management including sourcing for investment capital as well as banking and asset management of an entity throughout its entire life cycle is called finance. Accounting deals with the entry of transaction and preparation of financial data while finance is primarily involved in analyzing, interpreting and evaluation of financial data to guide in making informed business decisions. Sound economic management and prudent use of available resources is directly an offshoot of good understanding of fundamental accounting principles and appropriate entry of business...
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...------------------------------------------------- ENRON SCANDAL Enron’s Accounting Methods April 30, 2015 Acct 301-d02 LUO [Company address] April 30, 2015 Acct 301-d02 LUO [Company address] Melissa Vest Liberty University I. Introduction: Enron used many legal accounting practices to commit fraudulent accounting activities II. The genius, or ingenious, accounting methods Enron used: 1. Special purpose entities a. Synthetic leases b. FAS 140’s 2. Hedges 3. Share trust transactions 4. Minority interests 5. Prepays 6. Mark-to-market 7. Stock Games III. Conclusion: The beginning of the end Enron Scandal I have always tried to do the right thing, but where there was once great pride, now it’s gone. —From the suicide note of JOHN CLIFFORD BAXTER, Enron’s former vice chairman I. Enron used many legal accounting practices to commit fraudulent accounting activities: Enron was on the road to success when only a couple bad decisions were made that seemed to cause a panic that had them hiding and covering until the hole was too deep for them to climb out of. Was it optimism or cynicism that got Enron into the mess that ultimately destroyed it? II. The genius, or ingenious, accounting methods Enron used: “Enron executives applied for – and were subsequently granted – government deregulation. As a result of this declaration of deregulation, Enron executives were permitted to maintain agency over the earnings reports that were released to investors and...
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...Annual Financial Statements of Nestlé Pakistan Ltd. 03 04 06 07 08 08 09 Auditors» report to the members Balance sheet Profit and loss account Cash flow statement Statement of changes in equity Statement of recognized income and expenses Notes to the financial statements 1 2 AUDITORS» REPORT TO THE MEMBERS We have audited the annexed balance sheet of Nestlé Pakistan Limited (≈the Company∆) as at 31 December 2006 and the related profit and loss account, cash flow statement and statement of changes in equity, together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. It is the responsibility of the company»s management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit. We conducted our audit in accordance with auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the above...
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...Delaware State University – College of Business Department of Accounting, Economics and Finance Managerial Finance (43-300-02 - CRN#17392) Spring 2014 Place & Time Bank of America Building, Room 208 T&TH 12:00 – 1:15p.m. Instructor: Nancy Ning, PhD Office: Bank of America Building, Room 212F Office Hours: T&TH 11:00 – 11:50 a.m., 2:50 – 4:00 p.m.; W 1:00 – 3:00 p.m. and by appointment Email: zning@desu.edu Phone: 857-6966 REQUIRED MATERIALS: 1. Principles of Managerial Finance, Brief (6th ed.), plus MyFinanceLab, by Lawrence Gitman & Chad Zutter, Pearson/Prentice Hall, 2011. ISBN-10: 013611945X or ISBN-13: 978-0136119456. 2. Financial calculator: the Texas Instruments’ TI BAII PLUS is recommended. The link http://www.tvmcalcs.com/calculators/baiiplus/baiiplus_page1 gives a tutorial for the use of the calculator. PREREQUISITES: The following courses must have been completed previously with a grade of C or better: ACCT-205 and ECON-208. Students who have not met these prerequisites must drop this course. COURSE DESCRIPTION: The concepts developed in this course form the foundations for the area of finance. Major topics may include time value of money, valuation of stocks and bonds, risk and return, capital...
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...some industries, the competitive product-pricing structure permits companies to earn significant profits per sales dollar, while in other industries the product-pricing structure imposes a much lower profit margin. In most low-margin industries, however, companies often experience a relatively high rate of product throughput (i.e., turnover). A second reason for some of the variation in financial results and conditions among companies is the result of management philosophy and policy. Some companies reduce their manufacturing capacity to match more closely their immediate sales prospects, while others carry excess capacity to be prepared for future sales growth. Also, some companies finance their assets with borrowed funds, while others avoid that leverage and choose instead to finance their assets with owners’ equity. Some corporate management teams choose to not pay dividends to their owners, preferring to reinvest those funds in the company. And some companies choose to grow organically (i.e., increasing sales of internally developed products and/or services) while others focus on mergers and acquisitions as their dominant means for growing. Of course, another reason for some of the variation in reported financial results among companies is the...
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...1.Abstract The balance sheet is necessary because it shows what the business has (assets) and what the business owes against those assets (liabilities). The difference between the assets and the liabilities shows the net worth of the business. The net worth of the business is important in that it is a measurement of the time the business is expected to stay in financial power. The balance sheet also provides the business with information on how best it is able to pay its debts. Underwriters also use the information in the balance sheet (working capital) to assess the business' ability to finance its operations. The balance sheet is necessary for the managers. It assists the managers of businesses in making decisions regarding purchasing of equipments for the business. Business managers depend on the balance sheet to analyze whether buying certain equipment on debt is the right move for the business at that time. Business managers need the balance sheet so as to decide the best source of credit for the business at that time. The balance sheet shows the accounting equation in a physical representation. The balance sheet also shows the owner's equity for example, it shows the value of the stock and the number of shares outstanding. The balance sheet is also used by the government agencies to make sure that the business is complying with the set laws. It also provides information to any potential lenders of the business on the credit worthiness of the business. When a group of...
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...Accounting Processes’ and Financial Statements The purpose of this paper is to provide a foundation of knowledge for accounting and financial bookkeeping. To accomplish this, I will focus on two areas. First, I will provide some general definitions for common accounting processes and ideas; namely, generally accepted accounting principles, double entry accounting, historical cost, accrual basis versus cash basis accounting, and current assets and liabilities versus non-current items. Second, I will examine recent financial statements for three companies (i.e. Samsung, Lockheed Martin, and RTL Group), specifically their balance sheet, income statement, and statement of cash flow. This examination will include a prediction of future company trends concluding with which ever imparts a better sight picture for future financial and company growth, net income versus cash flow. Defining the aforementioned terms and examining our three companies will demonstrate some core foundational accounting principles and terminology. The term ‘generally accepted accounting principles’ (i.e. GAAP) has a very specific meaning for accountants and auditors. A code of professional conduct prohibits accountants from making statements that would imply or assert financial statements or other financial data conform to ‘generally accepted accounting principles,’ unless they actually fell within those principles promulgated by a body designated...
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...data is readily available via many financial websites, such as MSN Money, Google Finance, Yahoo Finance, etc. The incorporation of computer technology in finance classes has become more popular than ever in this information technology rich environment. Mediated classrooms have rapidly grown in numbers throughout the universities worldwide. Based on my experience as a finance professor, I have summarized this teaching note to demonstrate an alternative pedagogical tool in performing financial ratio analysis. The class assignment presented hereinafter is designed to help students learn how to assess the company's overall operations and current financial standing via an on-line database available in MSN Money website. It can be used in any corporate flnance class. I collected student feedback on the assignment, and the vast majority of the survey participants perceived the assignment as a very good learning experience. Keywords: financial ratio analysis. Du Pont analysis INTRODUCTION inancial ratio analysis is an important topic and is covered in all mainstream corporate finance textbooks. It is widely used to summarize the information in a company's financial statements so as to analyze its financial condition and performance. In today's information technology world, real time financial data is readily available via many financial websites, such as MSN Money, Google Finance, Yahoo Finance, etc. As students now have easy access to on-line financial databases, professors...
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...ZIMBABWE SCHOOL EXAMINATIONS COUNCIL (ZIMSEC) ADVANCED LEVEL SYLLABUS BUSINESS STUDIES 9198 EXAMINATION SYLLABUS FOR 2008-2012 2 BUSINESS STUDIES ZGCE Advanced Level 9198 CONTENTS Introduction Syllabus Aims Assessment Objectives Scheme of Assessment Curriculum Content Notes for Guidance Resource List PAGE 2 2 2 3 3 10 25 3 INTRODUCTION 1.1 The aim of this syllabus is to enable Centres to develop Business Studies courses that are suitable for Advanced Level candidates. The syllabus contains largely the same body of curriculum content as the Management of Business Advanced Level syllabus (9368) and AICE Business Studies syllabus (0128) which previously were examined by UCLES. Although no previous study of the subject is assumed by the syllabus, it would be recommended that students should have done 'O' Level Business Studies 1.2 1.3 2 SYLLABUS AIMS The syllabus is intended to lead to courses that will encourage students to: 2.1 2.2 Understand and appreciate the nature and scope of business and its role in society; Develop critical understanding of organisations, the markets they serve and the process of adding value. This should involve consideration of the internal workings and management of organisations and, in particular, the process of decision making in a dynamic environment; Be aware of the economic, environmental, ethical, governmental, legal, social, technological etc issues associated with business activity; Develop skills in:...
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...University MBA 501-Foundations Fall 2014 Term Company Analysis Coca-Cola Company Presented by xxxxx Submitted to xxxxxxx On 10/12/2014 The Coca-Cola Company is a multinational, nonalcoholic beverage company that offers its products through a network of “company-owned or controlled bottling and distribution operators, as well as through independent bottling partners, distributors, wholesalers, and retailers” (Yahoo Finance, Retrieved 2014). The Coca-Cola Company was founded by Asa Griggs Candler in 1886 and is headquartered in Atlanta, Georgia (Yahoo Finance, Retrieved 2014). The following is an analysis of Coca Cola Company. The evaluation will present financial ratios and a common-sized income statement. This analysis will provide insight of Coca Cola’s financial performance. Additionally, it will summarize an overall performance based on the ratios and financial statement. Coca Cola’s return on assets for year 2002 is 12% and 16% in 2003, as illustrated in Figure 1. The ratio increases over a year. The ratio is high and is assumed to be making good use of its assets (Loth, 2014). The net income for year 2002 is $3,050 and $4,347 in 2003. The total assets for 2002 is $24,406 and $27,342 in 2003. The ratio computation is the net income divided by the total assets is the return on assets. Figure 1. Chart showing the return on assets for Coca Cola. From “Coca-Cola Company and Subsidiaries Consolidated Balance Sheets,” by William J. Bruns...
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...JAN EDGAR “RED” M. TIAMZON’s GPOA General Plan of Actions as the Aspiring Local Chapter President of PLMar – Junior Philippine Institute of Accountants for the FY 2015 – 2016: SECRETARIAL – Schedule of events and notes during General Meeting (NFJPIA-NCR). AUDIT – Tally/Evaluation Sheets, Year-End Awards & the Full Disclosure of the FY 2015 – 2016. COMMUNICATIONS – Visiting the other Local Chapters and and inviting them, the Regional Council and the National Council to visit PLMar-JPIA. INFORMATION AND PUBLICITY – Editor of the Full Disclosure Handbook for the FY 2015 – 2016 for the Annual Local Convention. MEMBERSHIP – Placement office (for Internship/On-the-Job Training). FINANCE – Transparency of JPIA funds & increase in sponsorship matters. NON-ACADEMICS – General Assembly, General Meeting, Outreach Programs, Health Awareness Seminar, Foundation Day/Accountancy Week: Thanks Giving Mass, Ambassadors of Goodwill, JPIA’s Best Dance Crew, The Voice of JPIA & JPIAlympics. ACADEMICS – Qualifying Exam Review, Academic Conference, Debate Open, JPIA Cup 1 & 2 (TOA & Prac 1), JPIA Cup 3 & 4 (BL & T), JPIA Cup 5 & 6 (Aud Theo & Aud Prob), JPIA Cup 7 & 8 (Prac2 & MAS), JPIA Cup Jr., JPIA Business Case Competition & 1st Caña Cup. PRESIDENTIAL – Paragons (JPIA Hymn), Committee -> Associates, Aspirant’s training, Leadership Training Seminar, Student Leadership Congress, 1st Annual Local Convention: Amazing Race, Academic Conference, Non-Academic...
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...© Path Finance, www. path2finance.com CFA® Level 1 2011 (Also applicable for June 2012) Financial Reporting Analysis (R 22 to R 29) Includes material presented in the video lectures1 © Path Finance, www. path2finance.com Table of Contents 1.1 Financial Statements Analysis (R 22) ..........................................................................................................2 1.1.1 Introduction ....................................................................................................................................................................2 1.1.2 Financial Statements and Other Sources ......................................................................................................................2 1.1.3 Steps in financial Statement Analysis Framework .........................................................................................................3 1.2 Financial Reporting Mechanics (R 23) .........................................................................................................4 1.2.1 Classifying Financial Statements Elements ...................................................................................................................4 1.2.2 Accounting Equations ....................................................................................................................................................5 1.2.3 Statement of Owners Equity ...................................................................
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