Krispy Kreme

3662 words 15 pages
Krispy Kreme

1. The accuracy Glass and Farmer forecast through years 2003 and 2004 compared with actual results. In comparing the results we look at several key factors which include ratios and year over percent changes in two forms or methods. The first form is to compare the forecast to actual results. By applying these two methods we can determine the accuracy of the forecast between the results and forecast itself. Analysts forecast are based on a set of assumptions and information they perceive to be good or bad, the level of accuracy of the assumptions and perception of information will determine the accuracy of the forecast.
The first ratio we looked at was the Sales ratio which included net income,
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Boston Chicken’s area developers had to pay a one-time franchise fee of $35,000 with an additional $10,000 fee for grand opening expenses. Boston Chicken collected a 5% royalty fee on gross revenues. Boston Chicken would collect 2% of sales for national advertising and 3.75% for local advertising. Boston Chicken provided lines of credit for its area developers. Since Boston Chicken offered this, they collected interest on these loans. Boston Chicken also collected fees for software that they provided to their developers.
Krispy Kreme’s and Boston Chicken’s area developers are both similar and different. They are then same when it came to paying one-time fees and collecting royalties. Krispy Kreme and Boston Chicken are different when it comes to extras. Krispy Kreme did not offer loans where Boston Chicken did. On the other hand, Krispy Kreme made profits on selling products to its area developer where Boston Chicken didn’t.
4. In a year over year comparison for the three and six month period Krispy Kreme has experienced positive growth in many key areas. As a overall company revenues and expenses grew proportionally of 11% year over year for three and six month period but Krispy Kremes overall operating income grew at a higher rate of 18.82% and 44.25% and net income grew at a staggering rate of 333.33% and 169.81%, unfortunately this was due to a sale of "interest in equity method franchise"(Earlier this year in May Krispy Kreme sold

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