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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Starbucks’s Financial Statements

A friend is very interested in Starbucks as a company. Your friend is not a business major and has asked for your help to learn more about Starbucks. Refer to the financial statements and supplementary data for Starbucks in Appendix A.

Required:

Read through Appendix A, including the financial statements, the notes, managers’ discussion and analysis, the managers’ attestation statement, and the audit opinion. Prepare a brief written report for your friend that (in your opinion) provides two interesting and important pieces of information about Starbucks from the:

  • Balance Sheet
  • Income Statement
  • Statement of Cash Flows
  • Statement of Shareholders’ Equity
  • Management Discussion and Analysis

To determine

Write a brief report for your friend that provides two interesting and important pieces of information about Corporation S from the major financial statements and management discussion and analysis report.

Explanation

Corporation S is one of the multinational chain retailers of coffee products across the globe. Based on the financial statements of the Corporation S, following information can be extracted from the major financial statements and management discussion and analysis report as follows:

Balance sheet:

  • At the end of the fiscal year, Corporation S had a cash and cash equivalents of $2,462.3 million and large amount of inventory of $1,364.0 million.
  • There has been a significant increase in long term debts from $3,185.3 million (2016) to $3,932.6 million. Moreover, the total equity is $5,457.0 that comprises of 38% of total liabilities and equity of $14,365.6.

Income statement (Consolidated of earnings):

  • The total net revenues have increased substantially over the years from $19,162.7 million (2015) to $22,386.8 million (2017). The operating revenues have also been increased over the years from $15,811.6 million (2015) to $18,643.5 million (2017).
  • The interest expense and income tax expense has also increased significantly from 2015 to 2017. Moreover, the net earnings have also increased from $2,757.4 million (2015) to $2,884.9 million (2017).

Statement of cash flows:

  • At the end of the fiscal year, the net cash provided by operating activities of Corporation S has increased from $3,749...

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