Below are abbreviated income statements for Starbucks. The year ending September 30, 2013, included a large non recurring loss of $2,784 (million). Redo the 2013 income statement removing this nonrecurring loss from the SG&A + Other category and recalculating the taxes at 37% (removing the tax credit). With this new Performa income statement for 2013, predict the net income for the period ending September 30, 2014, by determining the growth rates of sales, COGS, SG&A, and interest expense. Use a tax rate of 37%. Then look up the numbers for Starbucks for 2014 and see how you did.

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Starbucks Abbreviated Income Statements for the Years Ending September 30, 2011–2013 (S in millions) Account 9/30/2011 9/30/2012 9/30/2013 9/30/2014 Sales $11,700 $13,300 $14,892 Cost of goods sold $ 4,916 $ 5,813 $ 6,382 SG&A + Other $ 5,396 $ 4,942 $ 8,713 $ 1,842 $ 2,091 $ (203) EBIT Interest expense 33 33 28 Taxes $ 674 $ (239) $ 563 Net income $ 1,246 $ 1,384