In turn, the Return on Equity, which is calculated my multiplying the Du Pont variables listed above, will most definitely be altered. The potential for return is, naturally, one of the most relevant factors for investors in determining if a stock is a worthy investment, and if so, how much of it to buy. A "downward" change in the ROE will most likely have a detrimental effect on stockholders who bought the Krispy Kreme stocks based on their projected profit margins, asset utilization and debt projections. The potential negative effects of these investigations and restatements will almost certainly decrease the company's ROE as well as projected profit margins.
Another factor involved in the Krispy Kreme restatement is the news that an SEC investigation will be undertaken. As the main concern of a publicly-held corporation ought to be ...
In light of these detrimental effects, a restatement of company assets, projected profits and debts, and other factors in determining the shareholders' return on equity will almost certainly be harmful not only to the individual stockholders of Krispy Kreme, but to the company as well by reducing investor confidence in the stock. Milton is correct in his reluctance to recommend the stock although he does believe that it will be profitable in the long run due to these factors.
Article: Dennis Milton, The Holes in a Krispy Kreme Rally, Business Week online 1/19/05
The potential negative effects of these investigations and restatements will almost certainly decrease the company's ROE as well as projected profit margins.
There is abundant opportunity in the western U.S. that KKD has yet to address. Each aspect of the strategy plan is now addressed by functional area: Market Development Over the next three years, KKD needs to first concentrate on competing more effectively in those regional markets where Dunkin' Donuts to this point has dominated the sale of donuts and related food and beverage items. This must begin with a build-out of