GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Chapter S, Problem 1C

Analyzing Starbucks’s Lease Disclosures

The following questions pertain to Starbucks’s 2012 balance sheet and lease footnote shown below.

  1. 1. Does Starbucks sign mainly operating or capital leases?
  2. 2. Where does Starbucks disclose its operating leases on its balance sheet?
  3. 3. Assume a discount rate of 6 percent and that the amount in the “thereafter” row in Starbucks’s foot-note disclosure is equally spread over the years 2018-2022. What is the present value of Starbucks’s operating leases at the end of fiscal 2012?
  4. 4. What is the impact on Starbucks’s 2012 debt-to-equity ratio of adding the present value of its operating leases to the liability section of its 2012 balance sheet?
  5. 5. Would making the adjustment in requirement (4) change your opinion about Starbucks’s creditworthiness?
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