The first case at the end of this chapter and each of the remaining chapters is a series of integrative cases involving Starbucks. The series of cases applies the concepts and analytical tools discussed in each chapter to Starbucks’ financial statements and notes. The preparation of responses to the questions in these cases results in an integrated illustration of the six sequential steps in financial statement analysis discussed in this chapter and throughout the book.
Income Statement
a. Starbucks reports three principal sources of revenues: company-operated stores, licensing, and foodservice and other consumer products. Using the narrative information provided in this case, describe the nature of each of these three sources of revenue.
b. What types of expenses does Starbucks likely include in
(1) Cost of Sales,
(2) Occupancy Costs
(3) Store Operating Expenses?
c. Starbucks reports Income from Equity Investees in its income statement. Using the narrative information provided in this case, describe the nature of this type of income.