Expert answer:Comprehensive Income and Retained Earnings Analysi
Expert answer:In no more than 525 words, use your company’s 10k from Week 1 to report on the following:Determine what the company’s comprehensive income is for the year (and prior 2 years).Identify what items are flowing through comprehensive income.Is comprehensive income higher or lower than net income? Why?Identify the company’s Earnings per Share for the year (and prior 2 years).Identify whether the company has both basic and diluted EPS.What trends do you see in comprehensive income and earnings per share?Has the company issued dividends, stock dividends or had a stock split in the past three years? Based on your additional analysis of the company, how has your evaluation of the company’s financial health changed since your analysis during Week 2?
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Running head: STARBUCKS CORPORATION
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Starbucks Corporation- Initial 10K Analysis
Week 1
STARBUCKS CORPORATION
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Starbucks Corporation is a roaster, marketer and retailer of specialty coffee. Its main
mission is ‘to inspire and nurture the human spirit- one person, one cup and one neighborhood
served at a time’. Through the company’s retail stores, Starbucks purchases, roasts ad sells high
quality packaged coffees that come along with freshly brewed coffees, teas and other beverages
with an additional variety of fresh food items. In addition, the company is focused on selection of
beverage making equipment and its accessories. It also sells a variety of coffee and tea products
through their chain of stores which include grocery stores, convenience stores and national food
service accounts.
Starbucks reports in financial statements under the U.S GAAP further, the company is
registered and traded under NASDAQ. Starbucks Corporation (NASDAQ; SBUX) recently
reported its 13 week fiscal third week and a 39 week fiscal year to the date ended July 2, 2017
(News, Ideas, Outlook, Strategy & Funds, 2017). Fiscal reports on the 2017 and 2016 results
included items that were excluded from the GAAP results.
As part of their mission, Starbucks is committed to maintaining uncompromising
principles as they grow, due to this, the board of directors ensures they exercise corporate
governance in the company. This is done in compliance with the auditor’s compliance and the
expected reporting standard by the board of directors. Thus they have an independent auditing
body that ensures they give a true and fair view of the company. Its Independent auditors are
Delloitte and Touchee LLP. These auditing companies ensure they give a true and fair view of
the company (“Company Information”, 2017).
STARBUCKS CORPORATION
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In the form 10-K of Starbucks corporation, the following are a list of financial statements
that are included.
Consolidated earnings for the fiscal year ended July 2, 2017, October 2, 2016 and
September 2, 2015.
Consolidated statements of comprehensive income for the fiscal year ended July 2, 2017,
October 2, 2016 and September 2, 2015.
Consolidated balance sheet of the fiscal year ended July 2, 2017 and October 2, 2016.
Consolidated statement of cash flows for the fiscal year for the fiscal year ended July 2,
2017, October 2, 2016 and September 2, 2015.
Consolidated statements of equity for the fiscal year ended July 2, 2017, October 27,
2016 and September 2, 2015.
Notes to consolidated financial statements and
Reports of the independent registered public accounting firm.
The financial statement schedules in the form are omitted. This is so because they are not
applicable in the consolidated financial statements or any notes described in the form under
section 15(a)(1) of the requirement.
Bases on the initial assessment, the consolidated revenues were $ 5.7 billion in the
financial year of 2017. This was an increase of 8% compared to the previous financial year of
2016. However, the increase was driven by the increased number of stores that generate more
STARBUCKS CORPORATION
revenue from the opening of the 2,341 net new stores over the last 12 months and a growth of
4% comparable sales.
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STARBUCKS CORPORATION
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References
Company Information. (2017). Starbucks Coffee Company. Retrieved 4 September 2017,
from https://www.starbucks.com/about-us/company-information
News, M., Ideas, S., Outlook, M., Strategy, I., & Funds, E. (2017). Starbucks
Corporation 10-K Nov 18 2016. Seeking Alpha. Retrieved 4 September 2017, from
https://seekingalpha.com/filing/3298320#SBUX1022016X10XK_HTM_S8E8E28B75B64C1ACD14D3265888F6D34
Running head: LONG-TERM ASSET AND LONG-TERM LIABILITY ANALYSIS
Week 2: Long-Term Asset and Long-Term Liability Analysis
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LONG-TERM ASSET AND LONG-TERM LIABILITY ANALYSIS
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Long-Term Asset and Long-Term Liability Analysis
Due to Starbucks’ (NASDAQ: SBUX) operations in the restaurant industry, analysis of
the company’s financial ratios must take into account a few important aspects, (Investopedia,
2017). Long-term asset and long-term ability analysis has been done on the Starbucks most
recent annual 10K report to determine what the company’s policy is related to long-lived assets,
goodwill, goodwill impairment testing, and deferred tax assets and liabilities.
Starbucks characterizes its intangible assets into two classifications; Goodwill and other
intangible assets. When evaluating goodwill, Starbucks will perform a qualitative review to help
determine what an asset is. Additional intangible assets include finite intangible assets, which are
generally things such as commerce techniques, licensing, and copyrights. These assets are
predicted every year as to which ones will be used and are analyzed to compare to things such as
property and equipment.
Starbucks evaluates goodwill for impairment annually during the third fiscal quarter, or
more frequently if an event occurs or circumstances change, such as material deterioration in
performance or a significant number of store closures. When evaluating goodwill for
impairment, Starbucks may first perform a qualitative assessment to determine whether it is more
likely than not that a reporting unit is impaired, (Stock Analysis on Net, 2017). What this means
is that Starbucks ensures that the impairment testing is done annually to see where goodwill
contributions stand and how it has varies.
Starbucks assesses the prospect of comprehension and the conceded impose resources
and then reports what the valuation remittance is. Starbucks can then discover what the
components of the tax breaks are. Upon finding the deferred tax assets, Starbucks can look at the
conceded impose resources and find which ones are commonplace to determine their net
LONG-TERM ASSET AND LONG-TERM LIABILITY ANALYSIS
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documented quality. Starbucks will then generate a change by using the information valuation to
determine what may diminish the overhead of their income taxes.
Starbucks Corp’s long-term debt for the quarter that ended in Mar. 2017 was $3,943 Mil.
Starbucks Corp’s total assets for the quarter that ended in Mar. 2017 were $14,228 Mil.
Starbucks Corp’s long-term debt to total assets ratio for the quarter that ended in Mar. 2017 was
0.28. Starbucks Corp’s long-term debt to total assets ratio increased from Mar. 2016 (0.20) to
Mar. 2017 (0.28). It may suggest that Starbucks Corp is progressively becoming more dependent
on debt to grow their business, (Gurufocus, 2017). The figures for Starbucks show that the
company will take on more debt in order to grow their business and while this may seem like a
hindrance to most companies, the company will likely see an increase in sales and revenue.
Starbucks Corp’s 10k report has details that are particular to their organization and are
very thoroughly detailed and researched. Every organizations 10K report will look different
based on their industry, what is required for them to report, and voluntary submissions of
information. Based on additional analysis of Starbucks 10K reports, it shows that the company is
in good financial standing, but will take on more debt in the coming years for expansions and for
taxes, but overall, the company is in good shape and looks to be that way for the coming years.
LONG-TERM ASSET AND LONG-TERM LIABILITY ANALYSIS
References
Gurufocus. (2017). Starbucks Corp (SBUX) Long-Term Debt & Capital Lease Obligation.
Retrieved from https://www.gurufocus.com/term/Long-Term+Debt/SBUX/Long-TermDebt–Capital-Lease-Obligation/Starbucks-Corp
Investopedia. (2017). Starbucks’ 6 Key Financial Ratios (SBUX) | Investopedia. Retrieved from
http://www.investopedia.com/articles/markets/111015/starbucks-6-key-financialratios.asp
Stock Analysis on Net. (2017). Starbucks Corp. (SBUX) | Goodwill and Intangible Assets.
Retrieved from https://www.stock-analysis-on.net/NASDAQ/Company/StarbucksCorp/Analysis/Goodwill-and-Intangible-Assets
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