Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
bartleby

Videos

Textbook Question
Book Icon
Chapter 4, Problem 1AAIC

Integrative Case 1.1 introduced the industry economics of coffee shops and the business strategy of Starbucks to compete in this industry. Exhibit 1.26 presents balance sheets for Starbucks for the years ending 2009–2012. Exhibit 1.27 presents its income statements and Exhibit 1.28 presents the statement of cash flows for the same years. Exhibit 1.29 presents common-size balance sheets and Exhibit 1.30 presents common-size income statements for Starbucks. Before beginning preparation of Integrative Case 4.1, we recommend that you review Integrative Case 1.1 in Chapter 1.

Part A of Integrative Case 4.1 analyzes changes in the profitability of Starbucks.

REQUIRED

  1. a. Exhibit 4.43 presents profitability ratios for Starbucks for fiscals 2010 and 2011. Using the financial statement data in Exhibits 1.26 and 1.27, compute the values of these ratios for fiscal 2012. The income tax rate is 35%. For accounts receivable turnover, use only specialty revenues for the numerator, because the accounts receivable are primarily related to licensing and food service operations, not the retail operations. Use cost of sales, including occupancy costs, for the numerator of the inventory turnover, because Starbucks does not disclose separately the cost of products sold (the appropriate numerator) and occupancy costs.
  2. b. What are the most important reasons for Starbucks’ ROA fluctuation during the three-year period? Analyze the financial ratios to the maximum depth possible with the information given. Using the nomenclature from the schematic in Exhibit 4.21 (page 298), Exhibit 4.44 (page 320) provides information for analyzing profitability at Level 1, Level 2, and Level 3. Exhibit 4.44 presents additional information for Starbucks at a business segment level to permit analysis at Level 4. Differences between the sum of segment expenses and total expenses reflect corporate-level expenses not allocated to the individual segments. Additionally, if necessary, access Starbuck’s annual report or form 10-K, which you should be able to access at the company’s investor relations website.
  3. c. What are the most important reasons for Starbucks’ ROCE fluctuation during the three-year period?

Exhibit 4.43

Chapter 4, Problem 1AAIC, Integrative Case 1.1 introduced the industry economics of coffee shops and the business strategy of

Blurred answer
Students have asked these similar questions
An S corporation earns 59.10 per share before taxes. The corporate tax rate is 39%, the personal tax rate on dividends is 15%, and the personal tax rate on non-dividend income is 36%. What is the total amount of earnings after - taxes? a. $3.28 b. $3.93 c. $2.62 d. $4.59
You want to buy a new sports car from Muscle Motors for $36,000. The contract is in the form of an annuity due for 60 months at an APR of 8.00 percent.      What will your monthly payment be?
Use the following information to answer this question: Net sales Windswept, Incorporated 2024 Income Statement Cost of goods sold Depreciation ($ in millions) Earnings before interest and taxes Interest paid Taxable income Taxes Net income $ 14,150 8,150 515 $ 5,485 108 $ 5,377 1,129 $ 4,248 Windswept, Incorporated 2023 and 2024 Balance Sheets ($ in millions) 2023 2024 2023 2024 Cash Accounts received $ 300 $ 330 Accounts payable $ 1,980 $1,955 1,190 1,090 Long-term debt 1,110 1,430 Inventory 2,120 1,795 Common stock 3,440 3,080 Total $ 3,610 $ 3,215 Retained earnings 690 940 Net fixed assets 3,610 Total assets $ 7,220 4,190 $ 7,405 Total liabilities & equity $ 7,220 $ 7,405 What is the fixed asset turnover for 2024?

Chapter 4 Solutions

Financial Reporting, Financial Statement Analysis and Valuation

Knowledge Booster
Background pattern image
Finance
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Text book image
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Text book image
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Text book image
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Text book image
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Text book image
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Topic 6 - Financial statement analysis; Author: drdavebond;https://www.youtube.com/watch?v=uUnP5qkbQ20;License: Standard Youtube License