Answer the following questions with the Starbucks company 10K:

1. Describe the format of the income statement (single-step, multi-step, hybrid) and identify why you describe it that way.
2. What items are included as part of the company’s other comprehensive income? Does the company report comprehensive income as a continuation of the income statement or as a separate statement?
3. Utilize the footnote addressing significant accounting policies to identify the method used to depreciate PP&E.
4. Think about the business model utilized by your selected company (how do they sell their products or services to customers). Utilize the footnote addressing significant accounting policies to summarize how they recognize revenue and any specific issues related to revenue recognition that they need to consider given their business model. Examples could include selling on credit, receiving payments in advance, sales returns, gift cards, collectability concerns, etc.
5. Evaluate the trend in sales/revenue over the past three years. Calculate the year over year percentage change in revenue. Discuss what you believe is driving the change in sales considering what you know about the company, the industry, and the overall economic conditions.
6. Evaluate the trend in net income over the past three years.
   1. Calculate profit margin (net income as a percent of revenue). Perform vertical analysis on key items (calculating each item as a percentage of revenue) of the income statement to help identify reasons for the change in profit margin rates between years.
   2. Calculate the year-over-year percentage change in net income. Compare the percentage change in revenue from question #5 to the percentage change in net income.
   3. Analyze and discuss your findings.
7. Compute your company’s current ratio and debt-to-equity ratio for both years presented in the balance sheet. Analyze and discuss what these ratios tell you about the company.
8. Select a competitor and calculate current ratio and profit margin for the competitor’s most recent year. Compare to your calculations for your company. Analyze and discuss.
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Table of Contents Fiscal Year Ended Net earnings including noncontrolling interests Other comprehensive income (loss), net of tax: Unrealized holding gains/(losses) on available-for-sale securities Tax (expense)/benefit Unrealized gains/(losses) on cash flow hedging instruments Tax (expense) benefit Unrealized gains (losses) on net investment bedging instruments Tax (expense)-benefit Translation adjustment and other Tax (expense)/benefi STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Reclassification adjustment for net (gains) losses realized in net earnings for available-for-sale securities, hedging instruments, and translation adjustment Tax expense(benefit) Other comprehensive income (loss) Comprehensive income including noncontrolling interests Comprehensive income (loss) attributable to noncontrolling interests Comprehensive income attributable to Starbucks. See Notes to Consolidated Financial Statements. 45 Sep 29, 2019 3,594.6 10.5 (2.3) (14.1) 3,4 (39.8) 10.1 (146.2) 2.5 1.3 1.6 (173.0) 3,421.6 (4.6) 3,426.2 S S Sep 30, 2018 4,518.0 (7.0) 1.9 24.4 (6.5) (2.2) (220.0) 3.4. 24.7 (1.2) (174.7) 4.343.3 (0.3) 4,343.6 $ $ Oct 1, 2017 2,884.9 (9.5) 2.9 53.2 (12.6) 20.1 (7.4) (38.3) (2.4) (67.2) 14.0 (47.2) 2,837.7 0.2 2,837.5 Table of Contents Fiscal Year Ended Net earnings including noncontrolling interests Other comprehensive income (loss), net of tax: Unrealized holding gains/(losses) on available-for-sale securities Tax (expense)/benefit Unrealized gains/(losses) on cash flow hedging instruments Tax (expense) benefit Unrealized gains (losses) on net investment bedging instruments Tax (expense)-benefit Translation adjustment and other Tax (expense)/benefi STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Reclassification adjustment for net (gains) losses realized in net earnings for available-for-sale securities, hedging instruments, and translation adjustment Tax expense(benefit) Other comprehensive income (loss) Comprehensive income including noncontrolling interests Comprehensive income (loss) attributable to noncontrolling interests Comprehensive income attributable to Starbucks. See Notes to Consolidated Financial Statements. 45 Sep 29, 2019 3,594.6 10.5 (2.3) (14.1) 3,4 (39.8) 10.1 (146.2) 2.5 1.3 1.6 (173.0) 3,421.6 (4.6) 3,426.2 S S Sep 30, 2018 4,518.0 (7.0) 1.9 24.4 (6.5) (2.2) (220.0) 3.4. 24.7 (1.2) (174.7) 4.343.3 (0.3) 4,343.6 $ $ Oct 1, 2017 2,884.9 (9.5) 2.9 53.2 (12.6) 20.1 (7.4) (38.3) (2.4) (67.2) 14.0 (47.2) 2,837.7 0.2 2,837.5

Answer rating: 100% (QA)

SOLUTION 1 Format of the income statement The income statement provided in the 10K filing for Starbucks Corporation appears to be a multistep format This is because it reports multiple revenue and exp... View the full answer