The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Krispy Kreme Doughnuts's current ratio for the quarter that ended in Apr. 2016 was 1.57.
Krispy Kreme Doughnuts has a current ratio of 1.57. It generally indicates good short-term financial strength.
The historical rank and industry rank for Krispy Kreme Doughnuts's Current Ratio or its related term are showing as below:
KKD's Current Ratio is not ranked *
in the Restaurants industry.
Industry Median: 1.04 * Ranked among companies with meaningful Current Ratio only.
Krispy Kreme Doughnuts Current Ratio Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Krispy Kreme Doughnuts's Current Ratio
For the Restaurants subindustry, Krispy Kreme Doughnuts's Current Ratio, along with its competitors' market caps and Current Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Krispy Kreme Doughnuts's Current Ratio Distribution in the Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, Krispy Kreme Doughnuts's Current Ratio distribution charts can be found below:
* The bar in red indicates where Krispy Kreme Doughnuts's Current Ratio falls into.
Krispy Kreme Doughnuts Current Ratio Calculation
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
Krispy Kreme Doughnuts's Current Ratio for the fiscal year that ended in Jan. 2016 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Krispy Kreme Doughnuts (NYSE:KKD) Current Ratio Explanation
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Krispy Kreme Doughnuts Current Ratio Related Terms
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Krispy Kreme Doughnuts (Krispy Kreme Doughnuts) Business Description
Krispy Kreme Doughnuts Inc was incorporated in 1999 in the State of North Carolina. The Company is a retailer and wholesaler of doughnuts, complementary beverages and treats and packaged sweets. The Company's business, which began in 1937, is owning and franchising Krispy Kreme stores. The Company's Original Glazed doughnut is sold and distributed together with complementary products such as coffees and other beverages. The Company's four business segments are Company Stores, Domestic Franchise, International Franchise and KK Supply Chain. The Company Stores segment is comprised of the doughnut shops operated by the Company. These shops sell doughnuts and complementary products through the on-premises and wholesale channels and come in two formats: factory stores and satellite shops. Factory stores have a doughnut-making production line, and many of them sell products through both on-premises and wholesale channels to more fully utilize production capacity. Factory stores also include commissaries which serve only wholesale customers. Satellite shops, which serve only on-premises customers, are smaller than factory stores, and include the hot shop and fresh shop formats. The Domestic Franchise segment consists of the Company's domestic store franchise operations. Domestic franchise stores sell doughnuts and complementary products through the on-premises and wholesale channels in the same way and using the same store formats as do Company stores. The International Franchise segment consists of the Company's international store franchise operations. International franchise stores sell doughnuts and complementary products almost exclusively through the on-premises sales channel using shop formats similar to those used in the United States, and also using a kiosk format. A portion of sales by the franchisees in Canada, the United Kingdom and Australia are made to wholesale customers. The KK Supply Chain segment produces doughnut mixes and manufactures doughnut-making equipment, which all factory stores, both Company and franchise, are required to purchase. In addition, KK Supply Chain sells other ingredients, packaging and supplies, mainly to Company-owned and domestic franchise stores. The Company competes for sales with many sweet treats, including those producers, such as Dolly Madison, Entenmanns, Little Debbie, Sara Lee, and regional brands. The Company is subject to federal, state and local environmental laws and regulations.
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