HW2_Questions

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FSA – Homework Assignment#2  E3-30, P3-54, M3-24, M3-25, and Starbucks case questions – profitability analysis (a) to (e) (See below the questions)  Please submit your answers in a PDF file to Canvas

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Starbucks Case Questions – Profitability Analysis Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington. Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 81 markets. Starbucks’ financial statements are provided in the supplementary material file. Profitability Analysis a. Compute Starbucks’ return on assets (ROA) for 201 9 and 2018. What trend do you observe in Starbucks ROA? (3 points) b. Decompose Starbucks’ ROA for 2019 and 2018 to its two main components we learned in class. Comment on which of the two components is causing the trend you observed in question 1(a) (5 points) c. Identify the two line items in the relevant financial statement that can explain the trend you observed in questions 1(a) and 1(b). (4 points) d. Calculate the firm’s ROE for 2019. What ratio differentiates between the firm’s ROA and ROE? Calculate that ratio. (3 points) e. Calculate the firm’s Cash Conversion Cycle (CCC) in 2018 and 2019. Is the firm’s CCC viewed positively? Why? (4 points)

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HW2_Questions

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