fin3334 case study

Case one

  • Title: Enron’s Demise–Were There Warning Signs?
  • Due: 11:59 pm on April 5th
  • Questions to answer in the report:
    • Evaluate Enron’s profit, leverage, and cash flow performance during the period 1998-2000.
    • Evaluate Enron’s long-run financial performance. Does the data reflect Enron’s transformation from a pipeline company to a trading company?
    • What is your assessment of Enron’s earnings quality?
    • Evaluate Enron’s financial leverage at the end of 2000.
    • Enron’s stock price traded around $62.72 per share at the end of April 2001. Do you think Enron was worth that much?

Case two

  • Title: Krispy Kreme Doughnuts, Inc.
  • Due: 11:59 pm on April 12th
  • Questions to answer in the report:
    • What can the historical income statements (case Exhibit 1) and balance sheets (case Exhibit 2) tell you about the financial health and current condition of Krispy Kreme Doughnuts, Inc.?
    • How can financial ratios extend your understanding of financial statements? What questions do the time series of ratios in case Exhibit 7 raise? What questions do the ratios on peer firms in case Exhibits 8 and 9 raise?
    • Is Krispy Kreme financially healthy at year-end 2004?
    • In light of your answer to question 3, what accounts for the firm’s recent share price decline?
    • What is the source of intrinsic investment value in this company? Does this source appear on the financial statements?
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