Facebook Pixel Code
x
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Several Types of Financial Ratios for Krispy Kreme and BCG Matrix for McDonald Essay Example

Show related essays

Several Types of Financial Ratios for Krispy Kreme and BCG Matrix for McDonald

This is a preview of the 4-page document
Read full text

Several Types of Financial Ratios for Krispy Kreme and BCG Matrix for McDonald. Krispy Kreme’s return on equity ratio of 3.5 is considered weak. This is especially in comparison to its prime competitor McDonald's has a 36.5% return on equity, while Starbucks shows a 20.2% return on equity (ADVFN, PLC).
The fourth ratio examined is the net profit margin ratio. It is calculated as follows: Net profit before tax / Net sales. This is an income statement ratio that measures profitability. In basic terms, it is the percentage of sales dollars left after subtracting the cost of goods sold and all other expenses, except for tax expense. It gives a good chance for a company to compare its “return on sales” with other similar companies in the same industry. (Liraz, pp.1-2). Krispy Kreme has a net profit margin ratio of 0.

This is an obvious weakness for them. Industry competitor McDonald's had a net profit margin ratio of 20.0, while Starbucks had a similar ratio of 4.0 (ADVFN, PLC).
The fifth ratio examined is the Revenue per share. The interpretation of revenue per share is straightforward. The higher revenue per share a company has, the better the company’s financial health is. Revenue per share helps compare different company’s ability to make money for shareholders. The higher the revenue per share, the higher each share will be worth. (Spireframe, p.1) Krispy Kreme has revenue per share of 5.52. This is the strength, especially compared to competitors. McDonalds Corporation stands at 1.62, while Starbucks is currently at 3.21 (ADVFN, PLC).
The final ratio examined is the Net Revenue Growth Rate ratio. It is calculated as to Revenue in ‘Year X’ – Revenue in Year 1 / Revenue in ‘Year X’. This is simply the per cent rate at which revenue is growing each year. Firms try to establish a rate at which earnings should grow over time. Companies with a 15% or higher growth rate are considered fast-growing companies. The higher rate is, the better it would be in regards revenue. (Business Glossary.com p.1) Krispy Kreme has a Net Revenue Growth Rate of 0.   . Several Types of Financial Ratios for Krispy Kreme and BCG Matrix for McDonald.

This is a preview of the 4-page document
Open full text

Works Cited

ADVFN, PLC. Krispy Kreme Doughnuts, Inc.

< http://www.advfn.com/p.php?pid=financials&symbol=NYSE%3AKKD> accessed on 19

August 2010.

ADVFN, PLC. McDonalds Corporation, Inc.

http://www.advfn.com/p.php?pid=financials&symbol=NYSE%3AMCD accessed on 19

August 2010.

ADVFN, PLC. Starbucks Corporation, Inc.

http://www.advfn.com/p.php?pid=financials&symbol=NASDAQ%3ASBUX accessed on 19

August 2010.

Business Glossary. < http://www.allbusiness.com/glossaries/growth-rate/4942323-1.html>

Accessed on 19 August 2010.

Enterpenuer.com website http://www.entrepreneur.com/encyclopedia/term/82208.html

Accessed on 19 August 2010.

Lirax, Meir. Financial Ratio Analysis. http://www.bizmove.com/finance/m3b3.htm accessed

On 19 August 2010.

Peavler, Rosemary. What is the total asset turnover ratio and How is it Calculated?

< http://bizfinance.about.com/od/financialratios/f/Total_Asset_Turnover.htm> accessed on

19 August 2010.

Spireframe. Earnings Per Share.

http://www.spireframe.com/docs/financial_ratio_earnings_per_share.aspx accessed on 19

August 2010.

Stock Market Investors. Understanding Return on Equity and Return on Assets.

http://www.stock-market-investors.com/stock-investing-basics/understanding-return-on-equity- and-return-on-assets.html accessed on 19 August 2010.

Close ✕
Tracy Smith Editor&Proofreader
Expert in: Business, Macro & Microeconomics, Management
Hire an Editor
Matt Hamilton Writer
Expert in: Business, Human Resources, Marketing
Hire a Writer
preview essay on Several Types of Financial Ratios for Krispy Kreme and BCG Matrix for McDonald
WE CAN HELP TO FIND AN ESSAYDidn't find an essay?

Please type your essay title, choose your document type, enter your email and we send you essay samples

Contact Us