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Assignment Financial Analysis Chapter 2.

This document contains the balance sheet for Starbucks for fiscal years 2008 through 2011. Key information includes: - Total assets increased from $5.6B to $7.4B indicating the company expanded. - Total liabilities increased from $5.6B to $7.4B with debt ratios changing from 47% to 24% showing reduced use of debt. - Retained earnings increased each year from $2.4B to $4.3B showing consistent net income and no dividends.

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Shaimaa Murad
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75 views

Assignment Financial Analysis Chapter 2.

This document contains the balance sheet for Starbucks for fiscal years 2008 through 2011. Key information includes: - Total assets increased from $5.6B to $7.4B indicating the company expanded. - Total liabilities increased from $5.6B to $7.4B with debt ratios changing from 47% to 24% showing reduced use of debt. - Retained earnings increased each year from $2.4B to $4.3B showing consistent net income and no dividends.

Uploaded by

Shaimaa Murad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ACTIVITY 15 U N D ER STAN D IN G THE BALANC E SH EET

Purpose: • Identify the value at which amounts are reported on the balance sheet.
• Understand what an increase or a decrease in an account indicates.
• Develop strategies for analyzing the balance sheet.

STARBUCKS (SBUX) BALANCE SHEET ($ in millions)


ASSETS 10/02/2011 10/03/2010 9/27/2009 9/28/2008
Cash and cash equivalents $ $ $ $
1,148. 1,16 599. 26
1 4.0 8 9.8
Short-term investments 902.6 285.7 66.3 52.5
Accounts receivable 385.6 302.7 271.0 329.5
Inventories 965.8 543.3 664.9 692.8
Other current assets 392.8 460.7 433.8 403.4
Property, plant, and equipment 6,163.1 5,888.7 5,700.9 5,717.3
Accumulated depreciation (3,808.1) (3,472.2) (3,164.5) (2,760.9)
PPE, net 2,355.0 2,416.5 2,536.4 2,956.4
Goodwill and other intangibles 433.5 333.2 327.3 333.1
Long-term investments 479.3 533.3 423.5 374.0
Other noncurrent assets 297.7 346.5 253.8 (L)
TOTAL ASSETS $ $ $ $
7,360. 6,38 5,576. 5,672.
4 5.9 8 6
LIABILITIES
Accounts payable $ $ $ $
540 2 267. 324
.0 82.6 1 .9
Short-term debt 0.0 0.0 0.0 713.0
Other current liabilities 1,535.8 1,496.5 1,313.9 1,151.8
Long-term debt 549.5 549.4 549.3 549.6
Other noncurrent liabilities 350.2 382.7 400.8 442.4
STOCKHOLDERS’ EQUITY
Contributed capital 41.2 146.3 187.1 40.1
Retained earnings 4,297.4 3,471.2 2,793.2 2,402.4
Other stockholders’ equity 46.3 57.2 65.4 48.4
TOTAL L & SE $ $ $ $
7,360. 6,38 5,576.
4 5.9 8 (Z)

Q1 Calculate the amounts that should be reported for (L) and (Z) on the 9/28/2008 balance sheet:
(L) = $ million (Z) = $ million

Q2 What was the beginning balance of the inventories account for the fiscal year ended on
10/02/2011? $ million 10/03/2010? $ million 9/27/2009? $ million

Q3 What amount of property, plant, and equipment was purchased (assuming no PPE was sold) during
fiscal year ended 10/02/2011? $ million 10/03/2010?$ million

Q4 From 9/28/2008 to 10/02/2011 accounts payable (increased / decreased), indicating


(more / less) financial risk. This company paid off accounts payable during fiscal years ended in
(2011 / 2010 / 2009). As of 10/02/2011 this company owes $ million to its suppliers.
Q5 Total Assets are (increasing / decreasing), indicating that this company is (expanding / shrinking).

Q6 Compute total liabilities for the fiscal year ended on:


10/02/2011? $ million 9/28/2008? $ million
Now compute the debt ratio for the fiscal year ended on:
10/02/2011? % 9/28/2008? %
Discuss the change in the company’s use of debt over this 4-year period.

Q7 From 9/28/2008 to 9/27/2009, Contributed Capital (increased / decreased), indicating the


company (issued more stock / purchased more assets / reported net income) during this
accounting period.

Q8 Retained Earnings is (increasing / decreasing), indicating the company (issued more stock /
purchased more assets / reported net income) during this accounting period. Assuming no
dividends were issued, how much net income (loss) was reported for the fiscal year ended on:

10/02/2011? $ million 10/03/2010? $ million 9/27/2009? $ million

The most profitable year was fiscal year ended (2011 / 2010 / 2009).

Q9 Develop a strategy to analyze the balance sheet. Which line would you look at first? Second? Third?
Why?

Q10 Review the series of balance sheets. This company appears to report a (strong / weak) financial
position. Why?Support your response with at least two observations.

Balance Sheet Chapter 2

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