Learning Goal: I’m working on a accounting multi-part question and need the explanation and answer to help me learn.
First, you need to download Starbuck’s most recent 10-K data and make a common-size balance sheet and common-size income statement. To download, go to sec.gov, click on company filings on the top right, and search “SBUXâ€� as Starbucks trading symbol. Search “10-Kâ€� in filing type or table to find the 10-K that you are looking for. Then click on the “Filing” button, then on “Interactive Dataâ€�. To download financial statements, click on “View Excel Documentâ€�. To view 10-K, click on “10-Kâ€�. Submit a written report to answer the following questions.
- Construct a common-size income statement and balance sheet using the most recent 10-K for two years.
- What are the company’s major operation models and product lines? What are the company’s main geographic locations? (hint: read Item 1: Business)
- What are the major assets? What are the intangible assets? Are there any unrecorded intangible assets?
- How is Starbucks financed?
- Review the revenue recognition policies in Note 1 to the Consolidated Financial Statements on 10-K. Does Starbucks record revenue when they receive cash from customers (cash-basis accounting) or follow a different rubric (e.g. accrual accounting)? How does the company record revenue differently depending on the operation models?
- How does Starbucks record revenue on stored value cards or gift cards? What challenges in measuring revenue do you observe? That is, are there any significant judgments management needs to make in recording sales revenue?
- What are its major expenses? Are there significant cost structure changes?
- Are there litigation charges and where are they included?
- Compare its net income to net cash provided by operating activities and explain the difference
- How much cash did Starbucks use for expenditures for PPE?
- What amount of dividends did Starbucks pay during the year? How does this amount compare to the amount of dividends declared as shown in the statement of equity?