Abstract

This case considers the sudden and very large drop in the market of equity for Krispy Kreme Doughnuts, Inc. associated with a series of announcements in 2004. These 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 these announcements and assess the financial of the company. This case is intended to be introductory: 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.

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