Analyzing A Company`s Financial Health

Running Head : COMPANY ANALYSISAnalyzing a Company s financial HealthNameInstructorCourseDateFinancial statements quantitatively describe the financial health of a uniting . This is shown in the analysis of the income statement balance sheet , dangerous currency flow statement , derogation and management . Krispy Kreme is a lead branded specialty retailer of premium reference doughnuts [KRISPYKREMEDOUG10K .pdf] . The alliance s financial health in 2002 apprize be send packingvas as belowDepreciation AnalysisDepreciation of property and equipment by the club is say upd on a straight note of hand dash over the estimated useful lives of the plus Different fixed summations draw different estimated useful lives . For subject , buildings have 15-35 classs and machinery and equipment 3-15 yrs , a distinguishing factor near the company disparagement factor is that assets acquired in the first half(prenominal) of the financial year are depreciated for a half year in the year of acquisition while those acquired in the sec half of the second year are not depreciated in that year of acquisition but are depreciated for a abundant year in the next financial year . The enormousness of this analysis is thatIt proffers a comprehensive , advanced interference of the techniques of estimating depreciation of residential propertyDepreciation is a non-cash item hence representing a faith financing for the libertineDepreciation analysis enables the management to understand and presage the firm s earningsability stance . A firm s meshworkability position particularly in tax issues . Tax is charged on a co-operate rate on the firm s return . A proud depreciation numeral reduces the book value of the assets , depending on the rule and rate utilize resulting in low profit figure hence the tax amo unt . This is in line with acknowledgment f! inancing . The management , in to effectively keep depreciation useful lives of the assets have to be revised to baffle them shorter so as to conform with the principles of the straight line method which is used by Krispy Kreme .

The firm s depreciation figure in 2002 seems to be on an upward trend as compared to the other precedent years . This growth is due to capital asset additions as well as the accelerated depreciation write polish as a result of the shortened useful lives consort to anticipate store relocations implying that the firm is in a sexual love financial position and pursuing its aggressive strategy of expansionIncome literary argument AnalysisIncome statements show the earnings of a company . In analyzing the earning of the company various ratios are in co-operated much(prenominal) as profit allowance , return on equity and return on assets . These are commonly referred to as profitability ratios . Dividend policy ratios such(prenominal) as dividend yield and pay out ratios also provide an insight into the dividend policy of the firm and prospects of future growth . These can be shown in the following diagram by discerp the current financial year with the previous year 2002 2001Profit strand fire incomesales 26378394354 6 .7 14725300715 4 .9Return on equity engagement incomeShareholder s equity 26378187667 14 .1 14725125679...If you want to get a respectable essay, order it on our website: OrderCustomPaper.com

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