Download the Case Analysis Template.

Download the Case Analysis Template.
Read the Krispy Kreme Doughnuts case (pp. 378-384) in Strategic Management and respond to the questions in the Case Analysis Template.
Download the Financial Ratios Spreadsheet and complete a ratio analysis for the case.
Focus primarily on the issues developed in Chapter 4 (The Internal Assessment) of your Strategic Management text. However, seek to respond to all questions asked in

the case analysis template, drawing from the information provided for the selected company in the text (you are not expected to do outside research on the selected

company, but rely solely on the information provided in the text).
Note that you will be submitting two documents: 1) the completed Case Analysis Template and (2) the completed Financial Ratios Template.
When you have completed your assignment, save a copy for yourself and submit a copy to your instructor using the Dropbox by the end of the workshop

Instructions:  Fill in the cells with $ (yellow highlighted) and the ratios will automatically calculate

Financial Ratios Analysis    Current Year    Previous Year    Previous Year

Liquidity Ratios
Current Ratio: Current Assets/Current Liabilities    –    –    –    extent to which a firm can meet short-term obligations – generally one wants an upward

trend
Quick Ratios:  Current assets minus inventory/current liabilities    –    –    –    extent to which a firm can meet short-term obligations w/o selling

inventory – generally one wants an upward trend
$  Current Assets
$  Current Liabilities
$  Inventory

Leverage Ratios
Debt-to-Total Assets Ratio: Total Debt/Total Assets    –    –    –    % of total funds provided by creditors – generally one wants a downward trend
Debt-to-Equity Ratios:  Total Debt/Total Stockholders’ Equity    –    –    –    % of total funds provided by creditors vs.. by owners – generally one wants a

downward trend
Times-Interest-Earned Ratio:  Profits before interest & taxes/Total Interest Charges    –    –    –    extent to which earnings can decline w/o firm being

unable to pay interest – generally one wants and upward trend
$  Total Debt
$  Total Assets
$  Total Stockholders’ Equity
$  Profits before Interest and taxes
$  Total Interest Expense

Activity Ratios
Inventory Turnover:  Sales/Inventory of Finished Goods    –    –    –    whether firm holds extensive inventory and is selling it slower than industry –

generally one wants and upward trend
Fixed Assets Turnover:  Sales/Fixed Assets    –    –    –    Sales productivity and plan and equipment utilization – generally one want to see an upward

trend
Total Assets Turnover:  Sales/Total Assets    –    –    –    whether firm is generating sufficient vol. of business. for size of asset investment –

generally one wants an upward trend
Average Collection Period:  Accounts Receivable/(Total credit sales/365 days)     –    –    –    average time it takes for firm to collect on credit sales –

generally one wants a downward trend
$  Sales
$  Inventory of Finished Goods
$  Fixed Assets
$  Total Assets
$  Accounts Receivable
$  Total Credit Sales (unless otherwise indicated, same as sales)

Profitability Ratios
Gross Profit Margin: Sales minus cost of good sold/Sales    –    –    –    total margin available to cover operating expenses and yield a profit –

generally one wants an upward trend
Operating Profit Margin:  Earnings before interest and taxes (EBIT)/Sales    –    –    –    profitability  w/o concern for taxes  and interest – generally

one wants and upward trend
Net Profit Margin:  Net Income/Sales    –    –    –    after-tax profits per dollar of sales – generally one wants an upward trend
Return on Total Assets (ROA):  Net income/Total Assets      –    –    –    after-tax profits per dollar of assets  (ROI) – generally one wants and upward

trend
Return on  Stockholders’ Equity (ROE):  Net Income/ Total Stockholders’ Equity    –    –    –    after-tax profits per dollar of stockholders’ investment in the

firm – generally one wants and upward trend
Sales Revenue (already entered above – no need to re-enter data)     –        –        –
$  Cost of goods sold or cost of sales
$  EBIT (Earnings Before Interest and Taxes)
$  Net Income (Earnings After Interest and Taxes)
Total Assets (already entered above – no need to re-enter data)     –        –        –
Total Stockholders’ Equity (already entered above – no need to re-enter)     –        –        –
$  Other Operating Expenses

Revenue/Expense
Sales Revenue (percentage change)    –    –    –    annual percentage growth rate in sales – generally one wants an upward trend
Cost of Sales  (percentage change)    –    –    –    annual percentage growth rate in cost of sales – generally one wants a downward trend
Operating Profit  (percentage change)    –    –    –    annual percentage growth rate in operating profit – generally one wants an upward trend
Net Income  (percentage change)    –    –    –    annual percentage growth rate in net income – generally one wants an upward trend

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