. Please calculate Starbucks Debt Ratio for each year. Do we want this ratio higher or lower? Did the company's performance improve or decline over that period? (Please show work and explain)
. Please calculate Starbucks Debt Ratio for each year. Do we want this ratio higher or lower? Did the company's performance improve or decline over that period? (Please show work and explain)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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1. Please calculate Starbucks Debt Ratio for each year. Do we want this ratio higher or lower? Did the company's performance improve or decline over that period? (Please show work and explain)
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INCOME STATEMENT
Net sales
Starbucks' Income Statements for Years Ending December 31
(in millions of dollars)
Earnings before interest and taxes (EBIT)
Non-operating income /expense
Q
Styles
Operating costs
Selling., general and administrative expense
Earnings before interest, taxes, depreciation, and amortization
(EBITDA)*
Depreciation and amortization
Less interest
Earnings before taxes (EBT)
Taxes
Net Income before preferred dividends
Common dividends
Addition to retained earnings
Preferred dividends
Income from continuing operations before extra ordinary items
Adjust available for extraordinary items
Net Income before preferred dividends
Sydni Jones SJ
Dictate
Voice
10
2007
E
Sensitivity Editor
Sensitivity
$1,413
S467
S946
$153
$1,057
S384
S673
$673
S673
2006
S9,411 $7,787 $6,369 $5,294
$7,509 S6,127 $4,968
S473
$4,153
S489
$357
S304
SO
$673
Editing
11
$906
S324
$582
$582
$17
$565
Editor
$1,187 $1,044
$387
$340
$800
S704
$117
SO
$565
2005
$94
1
$797
S302
S495
$495
2004
$495
SO
$495
$837
$289
$548
$75
S623
S232
$391
$391
$391
X
SO
$391
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Starbucks' Balance Sheet
(in millions of dollars)
Assets
Cash and equivalents
Short-term investments
Accounts receivable
Inventories
AN
A
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Styles
Liabilities and equity
Accounts payable
12
Prepaid Insurance and Lease
Deferred Income taxes (net) -Income taxes not paid
Total current assets
Long term investment (available for sale)
Equity and other investment
Net plant and equipment (net of depreciation)
Other assets
Please use the following financial statements for questions 1 and 2:
Other intangible assets (cash deposit from unearned sale)
Goodwill
Total assets
0
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Sydni Jones SJ
Commercial paper and short term borrowings (Notes Payable)
Accruals (Compensation, Occupancy)
Accrued taxes
Other Liabilities
Current portion of long term debt
Total current liabilities
Common stock (50,000,000 shares)
Paid in capital
Retained earnings (include repurchase of common stocks)
Total common equity
Total liabilities and equity
Dictate
Deferred income taxes
Long-term bonds
Other long term liabilities (Deferred Rent, asset retirement obligations,
etc.)
Total debt
Voice
2007
Sensitivity
$281
$157
$288
$692
$149
$129
$1,696
$21
S259
$2,890
$219
$42
S216
$5,343
Sensitivity
S391
S710
S664
$93
$296
$1
$2,155
SO
$550
-2006
C
$313
$174
$141
$133
S224
$191
S636
S546
$127
$94
$89
$71
$1,530 $1,209
S341
$700
$568
$94
$231
E
Editor
$60
$6
$219
$202
$2,288 $1,842
Editor
2005
$187
$73
$38
$35
$161
$93
$4,429 $3,514
$354
S263
$3,059 $2,201
Editing
$1
$39
S221
S277
$475
$78
$175
$1
$1,936 $1,227
$O
SO
$3
2004
$194
$1,424
$145
$508
$140
S423
$71
$64
$1,351
$136
$168
$1,551
$87
$28
$69
$3,390
$199
SO
$362
$63
$121
$1
$746
$21
$145
$916
$1
SO
SO
$39
$130
$996
$2,244
$2,188 $1,960
$1,478
$2,284
$2,228
$2,090
$2,474
$5,343 $4,429 $3,514 $3,390
$4
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