Q1. For Starbucks, use the amounts listed below to compute the trend indexes for noncurrent (NC) liabilities, common stock, and retained earnings by dividing each amount by the amount for the base year. Record the resulting trend index in the shaded area. Use 9/28/2008 as the base year.
Refer to the series of balance sheets and the trend analysis above to answer the following questions.
Q2. A trend index of 130 (total assets) indicates that the dollar amount is (______ / less) than the (previous / ______) year, whereas a trend index of 80 (PPE, net) indicates the dollar amount is (greater / ______) than the (previous / ______) year. For total assets, the trend index of 130 is computed by dividing $7,360.4 (total assets on 10/02/2011) by ______million (total assets of the base year). A trend index of 130 indicates total assets (______ / decreased) by 30% (from an index of 100 to 130) from 9/28/2008 to 10/02/2011.
Q3. From 9/28/2008 to 10/02/2011, which of the following accounts increased at a greater rate than total assets? (Noncurrent liabilities / Common stock / __________). The assets of this company are primarily financed with (liabilities / contributed capital / _________). This is referred to as (_________/ external) financing because these funds are generated by operations. Issuing stocks and bonds are forms of (internal / __________) financing because these funds come from investors outside of the firm.
Q4. The annual total asset growth rate can be compared between companies.
Assume less than 5% is low, 5 to 15% is moderate, and more than 15% is high.
The three-year average total asset growth rate of this company is considered (low / _________/ high). (________________________________________)
Q5. Examine the financial information reported above and comment on at least two items of significance that the trend analysis helps to reveal.