Final Financial Analysis Project
docx
keyboard_arrow_up
School
Saint Leo University *
*We aren’t endorsed by this school
Course
498
Subject
Accounting
Date
Apr 3, 2024
Type
docx
Pages
10
Uploaded by DeanWildcatMaster364
Final Financial Analysis Project: Starbucks
Richard Cotton
Saint Leo University
Financial Statement Analysis ACC-498-OL01
Professor Paula Beiser
Introduction
The company I have chosen for my financial analysis project is Starbucks corporation, they are a
retail coffee business that has operations all around the word. Starbucks was founded in 1971 in Seattle, Washington but has expanded outside of the U.S. all across Europe, East Asia, West Asia and Africa (Farr, 2017)! Their main source of revenue is their coffee retail sales; however, it is not their only stream of revenue these days. As Starbucks began selling food items, prepackaged snacks and retail merchandise in 2008 to great success prior to the 2008 housing crash where the items were briefly removed from the menu (Friedman, 2022). Other than that Starbucks also licenses its trademarks to various in store retailors to make pre packaged coffee bean sales, operate non-corporate stores and merchandise. With all that in mind it sure is a wide swath of irons to have in the fire for Starbucks and understandably makes them the biggest dog in the coffee retail business. But that does not mean they are without competition; their largest competitor is Dunkin’ Donuts followed behind McDonalds’ McCafé breakfast brand. Below I will delve deeper into Starbucks as a business and ultimately how they compare to the retail coffee market at large.
Starbucks Stock
Starbucks stock price has maintained a relatively stable rise and fall pattern following the pandemic that began in 2020. As covid impacted their coffee retail sales during the beginning but
their at home coffee sales did ramp up to compensate some during 2021. With revenue falling from almost $27 billion in 2019 to just over $23 billion in 2020, before taking a massive jump up
to $30.5 billion in 2021 and finally another jump up to $32.25 billion in 2022 (Market Cap, 2023). During that we saw COGS for each year increase 4% YOY from 2020 to 2021 and total operating expenses increased by 1% YOY. From 2021 to 2022 expenses increased by 8% for COGS and operating expenses increased by 11%. With those increased expenses in mind the gross margin has also increased to match exceed pace set by increased expenses by a staggering 14% between 2020 and 2021. Then from 2021 to 2022 gross margin only increased by 8% itself
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
which led to an overall reduction in Net income. Which would match the average YOY cost of goods increases but not cover the increase in the cost for operating, leading to a slight decline in net income that year despite overall revenue increasing. Which in my mind even though 2022 could be viewed as a year a step was taken back, I think Starbucks is marching towards a positive trend and is an overall healthy business. With that trend in mind one of the greater improvements to their balance sheet that Starbucks has
made is the reduction of their interest expense YOY. Back in 2018 they had $175 million in interest expense which took a massive 94% increase in 2019 to $340 million as a result of global expansion efforts (WSJ, 2023). Which saw another large increase of 35% to $458 million in 2020 as a result of the pandemic greatly reducing business revenue. Finally seeing a small jump of 8.5% to $497 million before evening itself out at $497 again in 2022. Which shows that the business is remaining healthy by keeping their interest liability stable through the year of 2022 and not acquiring new debt. Below is a table of net income that shows it growing between 2020 and 2021 but reducing during the year of 2022 due to some business expenses increasing. While there is a slight decrease in the trend of income in 2022, I still believe based on the graph below that Starbucks outlook is healthy and thriving!
Balance Sheet
Starbucks’ total assets fluctuate between the year of 2020 to 2022 starting with an increase from $29 billion to $31 billion in 2021 total assets before falling down to $28 billion in 2022. This shows a flat 6% increase from 2020 to 2021 then another sharp change but this time a decrease of 9.5% in total assets. The assets with the highest level of impact into these decreases were the rise and all of the current assets between 2020 and 2022 which were Starbucks’ cash equivalents and short-term investments seeing the most overall activity. With the assets fluctuating by a moderate percentage the liabilities have actually steadily declined YOY between 2020 and 2022. Declining from $37 billion in 2020 to $36.5 billion in 2021 and staying roughly the same in 2020
at $36.5 billion again. Showing a 1% drop in liabilities and then a 0% change between the years. Interestingly, current liabilities have increased each year by roughly 11% but are 1/3
rd
the size of long-term liabilities currently on the Starbucks’ balance sheet. Whereas the long-term liabilities on Starbucks’ balance sheet have dropped by around 4% each year. So, each year they have evened out or reduced slightly based on the raw numbers of each category. Which I find interesting that liabilities can be increasing and decreasing in opposite directions but end up
essentially netting out their change in the total liabilities line. Finally, for the balance sheet is the stockholders’ equity for Starbucks, which as certainly been a bit of an eye sore it seems over the past 3 years. In part due to heavy expansion requiring the taking of long-term liabilities and the hit to revenue during the pandemic. Seeing Starbucks’ 2020 stockholders’ equity at -$7.8 billion rise to only -$5.3 billion before once again falling down to $8.7 billion as pictured below. This steady decrease in Stockholders’ equity is due to Starbucks’ liabilities increasing at a greater rate than their assets. As in the long term they intend for these liabilities that are being added to increase the overall health of the business in the short-term when the liability is taken on it negatively effects the balance sheet. Overall, in regard to the balance sheet I think Starbucks’ balance sheet reads as a reasonable one for a large corporate entity with a large market cap. Currently it has a large number of assets but those are counterbalanced by the liabilities that have been taken on to acquire them. Meaning that in the near future as Starbucks continues to stabilize their business their assets will begin to far outpace their liabilities.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Statement of Cash Flows Starbucks’ experienced a considerable change in their cash flows over the period from 2020 to 2022, seeing massive increase in from 2020 to 2021 in cash generated by operating activities. Growing from $1.6 billion dollars to $6 billion dollars generated by operating activities which is nearly a 400% increase! They did experience a bit of a rubber band effect with cash generated by
operating activities reducing to only $4.4 billion in 2022 which is a 36% decrease but it is still a considerable increase from 2020. With the increase in cash provided by the operating activities unfortunately investing activities and financing activities did not maintain pace. Investing activities generated positive net cash in 2020 of $1.6 billion but fell to using $319.5 million instead in 2021 and an even greater drop to using $2.15 billion in cash in 2022. This was a result of Starbucks taking on significantly more in current liabilities during those periods and acquiring
more long-term investments. Resulting in more cash being invested in 2021 and 2022 than was generate in revenue from their prior investments. Lastly for the cash flows was the cash provided
for financing activities which followed suit with investing activities seeing a decline. Financing activities generated $1.7 billion in cash for 2020 but used $3.65 in cash in 2021 and used an even
greater amount of cash in $5.6 billion in 2022. The result in this drop was from Starbucks’ beginning more aggressive repayment on their short-term and long-term debt while also purchasing back more of their equity than it issued in those years. The below graph highlights the overall activity found within the cash flows on Starbucks’ financial statements.
Altogether, Starbucks’ operating activities provide them a solid cushion to be able to pursue investing and financing activities that seek to grow the business for the future. Especially in regard to their financing activities that they have been utilizing cash to pay debt back aggressively. Starbucks and its Competitors in the Industry
Starbucks exists at the top of its industry by market cap, it does however have some issues on the
liquidity and profitability front when it compares to its competitors. Starbucks currently boasts a 77% current ratio which means that currently it does not have the ability to pay 100% of its short-term obligations which is generally considered good. Where as its competitors and the industry average all boast an over 100% current ratio. Additionally, Starbucks, main competitors have a more favorable acid-test ratio. However, Starbucks at least comparatively to its 2 main competitors has a reasonable current cash debt ratio of 48% which is slightly worse than Dunkin’s but worse than McDonalds. With the liquidity ratios in mind Starbucks does begin to pull ahead of the pack when it comes to profitability and efficiency. Boasting a comparatively favorable return on common equity over Dunkin and McDonalds at 11.7% where as the other two have a negative return on common equity. Starbucks’ also boasts a 474% inventory ratio which is considerably higher than each of its competitors in the industry as well as an over 100%
asset turnover ratio. Showing that as time continues and Starbucks’ continues to dominate, they can turnover their inventory incredibly consistently and at higher and higher profits. Conclusion
Starbucks is a company I’m glad I got an opportunity to delve into as they are an incredibly large
part of the average American’s day to day life. Especially in my life as my girlfriend goes to Starbucks nearly everyday and her mother is the manager of a Starbucks in Maryland. What I have learned over the course of this project is I do believe based on their financial statements that
Starbucks would be a sound investment in the future. Especially as they continue to expand further into the global market!
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
References:
Farr, S. (2017, February 15). Zev Siegl, Jerry Baldwin, and Gordon Bowker, ca. 1971
. Starbucks:
The Early Years. Retrieved May 7, 2023, from https://www.historylink.org/file/20292 Friedman, S. (2022, December 18). When did Starbucks begin selling food?
Tasting Table. Retrieved May 7, 2023, from https://www.tastingtable.com/1136800/when-did-starbucks-
begin-selling-food/ Market Cap. (2023). Starbucks (SBUX) - revenue
. CompaniesMarketCap.com - companies ranked by market capitalization. Retrieved May 7, 2023, from https://companiesmarketcap.com/starbucks/revenue/ Starbucks. (2023). Financial Data
. Starbucks Corporation - Financial Data - SEC Filings - SEC Filings Details. Retrieved May 7, 2023, from https://investor.starbucks.com/financial-
data/sec-filings/sec-filings-details/default.aspx?FilingId=16213124 WSJ. (2023). Starbucks Corp. Wall Street Journal Markets.
The Wall Street Journal. Retrieved May 7, 2023, from https://www.wsj.com/market-data/quotes/SBUX/financials/annual/income-statement
Related Documents
Related Questions
R
i
Fres
Question based on modified problems 3.3 from the reference text [Flynn (2009)] from page 78 of the textbook
Polymerco, a North American manufacturer of specialty polymers, has the following highly condense income statement, given in the table
below. There current sales are to North American customers only. The president casually mentions that it would be nice to have more
offshore sales to diversity the company.
Polymerco Income Statement
Gross sales
Bad debt
Net sales
COGS
Contribution margin
CM (%)
SG&A
This year ($000)
26507
nil
Operating income
Other income and interest on long-term
debt
*%
26507
22,243
4264
16.1%
2,122
2142
-60
Last year ($000)
24177
nil
24177
21,341
2836
11.7%
2,067
769
-50
Net income
2082
719
(a) if Polymerco's production is running at 84% capacity, what is the maximum discount in percentage that you can provide?
Maximum discount 11.0
x %
In this case, will you have a negative impact on the profitability of the business?
No ✔
(b) if Polymerco's…
arrow_forward
Use The Table in the picture in the Image and then creat a Pie chart and Answer the following Question (50words)
Scenario: You have been recruited as a new graduate trainee to support the Managing Director of Zarraffa’s Coffee. You are required to conduct a comprehensive analysis of the café and coffee shop industry and market dynamics in Australia.
arrow_forward
Investment Proposals for Orio Coffee House
Daniel Jackson, CEO of OCH, has approached you to work on 2 investment proposals that the company is considering:
1. Buying coffee roaster plant in Mexico.
2. The Reconstruction of coffee shops to add the selling of yogurt.
Mr. Daniel reminds you to consider only relevant expense and income. “Relevant costs have to be occurring in the future,”He said. “And have to be unique from the status quo. For example, if we choose to buy the roaster plant, it is only the incremental revenue and costs related to the purchase that should be considered. We also need to take into account the opportunity cost associated with the alternatives.”
More details on both of investment proposal is written below. Mr. Daniel wants you to recommend after evaluation, if OCH should invest in one, both, or none of the investment proposals.
Required Return
Mr. Daniel wants you to use 7% as the discount rate (i.e., the required return).
First Proposal of Investment in…
arrow_forward
Use the Graph in the picture To answer the following Question . (100words)
Scenario: You have been recruited as a new graduate trainee to support the Managing Director of Zarraffa’s Coffee. You are required to conduct a comprehensive analysis of the café and coffee shop industry and market dynamics in Australia.
arrow_forward
Solve both parts of this practice problem
arrow_forward
Why might Mays be less than enthusiastic about accepting the investment proposal for the new system despite her belief in the benefits of the new technology?
arrow_forward
!
Required information
[The following information applies to the questions displayed below.]
Sub Station and Planet Sub reported the following selected financial data ($ in thousands). Sub Station's business strategy
is to sell the best tasting sandwich with the highest quality ingredients. Planet Sub's business strategy is to sell the lowest
cost sub on the planet.
Net sales
Net income
Total assets, beginning
Total assets, ending
Choose Numerator
2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e.
123,000 should be entered as 123).)
Choose Numerator
Choose Numerator
÷
=
16
÷
+
..
÷
+
Sub Station
$109,049
26,722
75,983
117,971
4
Planet Sub
$62,871
4,292
39,999
46,133
Return on Assets
Choose Denominator
Profit Margin
Choose Denominator
Asset Turnover
Choose Denominator
| 11 ||
Return on Assets
Return on assets
Profit Margin
Profit Margin
Asset Turnover
Asset
Turnover
0 times
e
0
arrow_forward
Use the following information to answer #7 and # 8
An investment banker is analyzing two companies as possible investments, but is concerned about
the impact that each company's cost structure might have on its profitability. The following CVP
income statements are available for Chantal Corp. and Mantle, Inc.
Chantal Corp.
Mantle, Inc.
Sales revenue
$700,000
$700,000
Variable costs
350,000
487,500
Contribution margin
350,000
212,500
Fixed costs
225.000
87,500
Net income
$125,000
$125.000
If sales decrease by 20% for each company, the impact on net income will be:
a decrease of 10% for Chantal and a decrease of 14% for Mantle.
O a decrease of 20% for Chantal and a decrease of 20% for Mantle.
O a decrease of 56% for Chantal and a decrease of 34% for Mantle.
O a decrease of 56% for Chantal and a decrease of 78% for Mantle.
arrow_forward
Before you begin this assignment review the Tying It All Together feature in the chapter
Starbucks Corporation is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in 68 countries. Starbucks generates revenues through company-operated stores, licensed stores, and consumer packaged goods. In 20 5, revenues from company-operated stores accounted for 79% of total revenues. Starbucks states that its retail objective is to be the leading retailer and brand of coffee and tea by selling the finest quality coffee, tea, and related products In addition, the company strives to provide the Starbucks Experience by exemplifying superior customer service and providing clean and well maintained stores. Part of this experience involves providing free internet service to customers while they are enjoying their food and beverages.
Requirements
How would the cost of internet service be reported by Starbucks and on which financial statement?
Suppose Starbucks…
arrow_forward
Research Problem 1. Jerry Jeff Keen, the CFO of Boots Unlimited, a Texas corporation, has come to you
regarding a potential restructuring of business operations. Boots has long manufactured its western boots
in plants in Texas and Oklahoma. Recently, Boots has explored the possibility of setting up a manufacturing
subsidiary in Ireland, where manufacturing profits are taxed at 12.5%. Jerry Jeff sees this as a great idea,
given that the alternative is to continue all manufacturing in the United States, where profits are taxed at
21%.
Boots plans to continue all of the cutting, sizing, and hand tooling of leather in its U.S. plants. This material
will be shipped to Ireland for final assembly, with the finished product shipped to retail outlets all over
Europe and Asia.
Your initial concern is whether the income generated by the Irish subsidiary will be considered foreign base
company income. Address this issue in a research memo, along with any planning suggestions.
arrow_forward
Please help me with show all calculation thanku
arrow_forward
Please do not give solution in image format thanku
arrow_forward
PROJECT:
You have been hired as an analyst for Metro Bank and your team is working on an independent assessment of Korsiney’s Food Inc. (KF Inc.) KF Inc. is a firm that specializes in the production of freshly imported farm products from France. Your assistant has provided you with the following data for Flipper Inc and their industry.
Ratio
1999
1998
1997
1999-
Industry Average
Long-term debt
0.45
0.40
0.35
0.35
Inventory Turnover
62.65
42.42
32.25
53.25
Depreciation/Total Assets
0.25
0.014
0.018
0.015
Days’ sales in receivables
113
98
94
130.25
Debt to Equity
0.75
0.85
0.90
0.88
Profit Margin
0.082
0.07
0.06
0.075
Total Asset Turnover
0.54
0.65
0.70
0.40
Quick Ratio
1.028
1.03
1.029
1.031
Current Ratio
1.33
1.21
1.15
1.25
Times Interest Earned
0.9
4.375
4.45
4.65
Equity Multiplier
1.75
1.85
1.90
1.88
What can you say about the firm's…
arrow_forward
PROJECT:
You have been hired as an analyst for Metro Bank and your team is working on an independent assessment of Korsiney’s Food Inc. (KF Inc.) KF Inc. is a firm that specializes in the production of freshly imported farm products from France. Your assistant has provided you with the following data for Flipper Inc and their industry.
Ratio
1999
1998
1997
1999-
Industry Average
Long-term debt
0.45
0.40
0.35
0.35
Inventory Turnover
62.65
42.42
32.25
53.25
Depreciation/Total Assets
0.25
0.014
0.018
0.015
Days’ sales in receivables
113
98
94
130.25
Debt to Equity
0.75
0.85
0.90
0.88
Profit Margin
0.082
0.07
0.06
0.075
Total Asset Turnover
0.54
0.65
0.70
0.40
Quick Ratio
1.028
1.03
1.029
1.031
Current Ratio
1.33
1.21
1.15
1.25
Times Interest Earned
0.9
4.375
4.45
4.65
Equity Multiplier
1.75
1.85
1.90
1.88
You are asked to provide the…
arrow_forward
PROJECT:
You have been hired as an analyst for Metro Bank and your team is working on an independent assessment of Korsiney’s Food Inc. (KF Inc.) KF Inc. is a firm that specializes in the production of freshly imported farm products from France. Your assistant has provided you with the following data for Flipper Inc and their industry.
Ratio
1999
1998
1997
1999-
Industry Average
Long-term debt
0.45
0.40
0.35
0.35
Inventory Turnover
62.65
42.42
32.25
53.25
Depreciation/Total Assets
0.25
0.014
0.018
0.015
Days’ sales in receivables
113
98
94
130.25
Debt to Equity
0.75
0.85
0.90
0.88
Profit Margin
0.082
0.07
0.06
0.075
Total Asset Turnover
0.54
0.65
0.70
0.40
Quick Ratio
1.028
1.03
1.029
1.031
Current Ratio
1.33
1.21
1.15
1.25
Times Interest Earned
0.9
4.375
4.45
4.65
Equity Multiplier
1.75
1.85
1.90
1.88
In the annual report to the…
arrow_forward
Hi, can someone help me with this please?
arrow_forward
Need help with this financial accounting question
arrow_forward
Need help with this accounting question
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you

Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning

Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning

Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,

Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Related Questions
- R i Fres Question based on modified problems 3.3 from the reference text [Flynn (2009)] from page 78 of the textbook Polymerco, a North American manufacturer of specialty polymers, has the following highly condense income statement, given in the table below. There current sales are to North American customers only. The president casually mentions that it would be nice to have more offshore sales to diversity the company. Polymerco Income Statement Gross sales Bad debt Net sales COGS Contribution margin CM (%) SG&A This year ($000) 26507 nil Operating income Other income and interest on long-term debt *% 26507 22,243 4264 16.1% 2,122 2142 -60 Last year ($000) 24177 nil 24177 21,341 2836 11.7% 2,067 769 -50 Net income 2082 719 (a) if Polymerco's production is running at 84% capacity, what is the maximum discount in percentage that you can provide? Maximum discount 11.0 x % In this case, will you have a negative impact on the profitability of the business? No ✔ (b) if Polymerco's…arrow_forwardUse The Table in the picture in the Image and then creat a Pie chart and Answer the following Question (50words) Scenario: You have been recruited as a new graduate trainee to support the Managing Director of Zarraffa’s Coffee. You are required to conduct a comprehensive analysis of the café and coffee shop industry and market dynamics in Australia.arrow_forwardInvestment Proposals for Orio Coffee House Daniel Jackson, CEO of OCH, has approached you to work on 2 investment proposals that the company is considering: 1. Buying coffee roaster plant in Mexico. 2. The Reconstruction of coffee shops to add the selling of yogurt. Mr. Daniel reminds you to consider only relevant expense and income. “Relevant costs have to be occurring in the future,”He said. “And have to be unique from the status quo. For example, if we choose to buy the roaster plant, it is only the incremental revenue and costs related to the purchase that should be considered. We also need to take into account the opportunity cost associated with the alternatives.” More details on both of investment proposal is written below. Mr. Daniel wants you to recommend after evaluation, if OCH should invest in one, both, or none of the investment proposals. Required Return Mr. Daniel wants you to use 7% as the discount rate (i.e., the required return). First Proposal of Investment in…arrow_forward
- Use the Graph in the picture To answer the following Question . (100words) Scenario: You have been recruited as a new graduate trainee to support the Managing Director of Zarraffa’s Coffee. You are required to conduct a comprehensive analysis of the café and coffee shop industry and market dynamics in Australia.arrow_forwardSolve both parts of this practice problemarrow_forwardWhy might Mays be less than enthusiastic about accepting the investment proposal for the new system despite her belief in the benefits of the new technology?arrow_forward
- ! Required information [The following information applies to the questions displayed below.] Sub Station and Planet Sub reported the following selected financial data ($ in thousands). Sub Station's business strategy is to sell the best tasting sandwich with the highest quality ingredients. Planet Sub's business strategy is to sell the lowest cost sub on the planet. Net sales Net income Total assets, beginning Total assets, ending Choose Numerator 2. Calculate Planet Sub's return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e. 123,000 should be entered as 123).) Choose Numerator Choose Numerator ÷ = 16 ÷ + .. ÷ + Sub Station $109,049 26,722 75,983 117,971 4 Planet Sub $62,871 4,292 39,999 46,133 Return on Assets Choose Denominator Profit Margin Choose Denominator Asset Turnover Choose Denominator | 11 || Return on Assets Return on assets Profit Margin Profit Margin Asset Turnover Asset Turnover 0 times e 0arrow_forwardUse the following information to answer #7 and # 8 An investment banker is analyzing two companies as possible investments, but is concerned about the impact that each company's cost structure might have on its profitability. The following CVP income statements are available for Chantal Corp. and Mantle, Inc. Chantal Corp. Mantle, Inc. Sales revenue $700,000 $700,000 Variable costs 350,000 487,500 Contribution margin 350,000 212,500 Fixed costs 225.000 87,500 Net income $125,000 $125.000 If sales decrease by 20% for each company, the impact on net income will be: a decrease of 10% for Chantal and a decrease of 14% for Mantle. O a decrease of 20% for Chantal and a decrease of 20% for Mantle. O a decrease of 56% for Chantal and a decrease of 34% for Mantle. O a decrease of 56% for Chantal and a decrease of 78% for Mantle.arrow_forwardBefore you begin this assignment review the Tying It All Together feature in the chapter Starbucks Corporation is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in 68 countries. Starbucks generates revenues through company-operated stores, licensed stores, and consumer packaged goods. In 20 5, revenues from company-operated stores accounted for 79% of total revenues. Starbucks states that its retail objective is to be the leading retailer and brand of coffee and tea by selling the finest quality coffee, tea, and related products In addition, the company strives to provide the Starbucks Experience by exemplifying superior customer service and providing clean and well maintained stores. Part of this experience involves providing free internet service to customers while they are enjoying their food and beverages. Requirements How would the cost of internet service be reported by Starbucks and on which financial statement? Suppose Starbucks…arrow_forward
- Research Problem 1. Jerry Jeff Keen, the CFO of Boots Unlimited, a Texas corporation, has come to you regarding a potential restructuring of business operations. Boots has long manufactured its western boots in plants in Texas and Oklahoma. Recently, Boots has explored the possibility of setting up a manufacturing subsidiary in Ireland, where manufacturing profits are taxed at 12.5%. Jerry Jeff sees this as a great idea, given that the alternative is to continue all manufacturing in the United States, where profits are taxed at 21%. Boots plans to continue all of the cutting, sizing, and hand tooling of leather in its U.S. plants. This material will be shipped to Ireland for final assembly, with the finished product shipped to retail outlets all over Europe and Asia. Your initial concern is whether the income generated by the Irish subsidiary will be considered foreign base company income. Address this issue in a research memo, along with any planning suggestions.arrow_forwardPlease help me with show all calculation thankuarrow_forwardPlease do not give solution in image format thankuarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage LearningSurvey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage LearningFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
- Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub

Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning

Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning

Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,

Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub