Financial Indicators and Trend Analysis 1. Analyze various ratio analyses and compare them to the financial statements and footnotes. Note any similarities or differences. Ratios are given, compare them to the financials and footnotes, review them comment if you
Financial Indicators and Trend Analysis
1. Analyze various ratio analyses and compare them to the financial statements and footnotes. Note any similarities or differences. Ratios are given, compare them to the financials and footnotes, review them comment if you feel necessary. Are there any similarities or differences in the ratios year over year? Do they make sense for the industry?
2. In reviewing the gross profit ratio, 2010 and 2011 were consistent versus a slight decrease in 2012. If management is looking to increase the gross profit ratio by 4%, what changes would need to be made in the components of gross profit (i.e., how much would sales increase if prices remained the same?)? Defend your response. One of my favorite questions. There are many ways to change the gross profit ratio by 4%, pick a few options (raising prices to increase revenue for example)
3. Analyze the return on assets (ROA) and discuss the advantages or disadvantages if Starbucks should expand assets by 5% but remain stable with sales. Use ROA given and do the math should assets expand by 5%. there are a few scenarios to work with here.
4. Perform a horizontal trend analysis on the revenue components of Starbucks’s consolidated statements of earning and develop a pro forma financial statement for the next year, noting that coffee inventory will increase by 20% and same-store sales will remain flat. Ensure all information is entered accurately. Self explanatory
III. Interpret Financial Information
Based on the case and researching Starbucks corporate philosophy:
a. Summarize how Starbucks meets its mission of “creating a reservoir of trust with their customers, partners, and communities that is deeper than at any time in their history.” Use some examples in the case study, if something new has happened you can use that information as well.
2. What considerations would need to be identified in the financial statements if Starbucks carries out its commitment to hiring veterans and military spouses? Why? This is a great question, what considerations did they need to follow? Since time has gone past did it work? Why or why not.
3. As controller, what are three challenges related to meeting this goal? What do you think, based on information given in the case study, are the three challenges. Did these challenges present themselves in the past few years?
4. Starbucks is planning to open 1,500 new stores within the next 10 years. Evaluate the feasibility of opening stores in China, Brazil, and the CzechRepublic. Use the information from the years in the case study.
5. Rate each of the three locations with regard to prior sales history. Use the years in the case study