Please check my assignment and I'm missing the answer to Restructuring Charge/Operating Revenues

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Financial Reporting, Financial Statement Analysis, and Valuation: A Strategic Perspective, 8^thed.

Author:James M. Wahlen, Stephen P. Baginski, & Mark T. Bradshaw

ISBN:978-1-285-19090-7

Publisher:South-Western Cengage Learning

Digital or eBook or Physical text:Physical text

Running head: CASE STUDY Case Study Assignment 1 Integrative Case 4.1 and 5.4 Valparisia Gibson Kaplan University GM506 Strategic Financial Analysis Professor Geoffrey Vanderpal March 22, 2016 1 INTEGRATIVE CASE STUDY 2 Chapter 5 Integrative Case 4.1 Starbucks Chapter 4: Integrative Case 4.1 Starbucks, Profitability ratios: a (p. 318): Exhibit 4.43 presents profitability ratios for Starbucks for fiscals 2010 and 2011. Using the financial statement data in Exhibits 1.26 and 1.27, compute the values of these ratios for fiscal 2012. The income tax rate is 35%. For accounts receivable turnover, use only specialty revenues for the numerator, because the accounts receivable are primarily related to licensing and food service operations, not the retail operations. Use cost of sales, including occupancy costs, for the numerator of the inventory turnover, because Starbucks does not disclose separately the cost of products sold (the appropriate numerator) and occupancy costs. Profit Margin for ROA: 390.1 + (1 - .35)($.3)/$5,294.3= 7.4% Assets Turnover: $5,294l.3/.5($2,778.5 + $3,390.5) = 1.7 Return on Assets: $390.6 + (1 - .35)($.3)/.5($2,778.5 + $3,390.5) = 12.7% Profit Margin for ROCE: $390.6/$5,294.3 = 7.4% Capital Structure Leverage: .5($2,778.5 + $3,390.5)/.5($2,071.1 + $2,474.2) = 1.4 Return on Common Shareholders' Equity: $390.6/.5($2,071.1 + $2,474.2) = 17.2% Cost of Sales/Operating Revenues: $2,191.4/$5,294.3 = 41.4% Stores Operating Expenses/Operating Revenues: $1,790.2/$5,294.3 = 33.8% Other Operating Expenses/Operating Revenues: INTEGRATIVE CASE STUDY 3 $171.6/$5,294.3 = 3.2% Depreciation and Amortization Expenses/Operating Revenues: $289.2/$5,294.3 = 5.5% General and Administrative Expense/Operating Revenues $304.3/$5,294.3 = 5.7% Restructuring Charge/Operating Revenues: Income from Equity Investees/Operating Revenues: $60.7/$5,294.3 = 1.1% Interest Revenue/Operating Revenues: $14.4/$5,294.3 = 3% Income Tax Expense (excluding tax effects of interest expense)/Operating Revenues: [$231.8 + (.35 x .3)]/$5,294.3 = 4.4% Accounts Receivable Turnover $5,294.3/.5($114.5 + $140.2) = 41.6 Inventory Turnover: $2,191.4/.5($342.9 + $422.7) = 5.7 Fixed Asset Turnover: $5,294.3/.5($1,447.7 + $1,551.4) = 3.5 Chapter 5 Integrative Case 5.4 Starbucks 2. Chapter 5: Questions and Exercises: 5.4 (p. 384): 5.4 Relation between Current Ratio and Quick Ratio. A firm has experienced a decrease in its current ratio but an increase in its quick ratio during the last three years. What is the likely explanation for these results? INTEGRATIVE CASE STUDY 4 The difference between the current ratio and quick ratio calculations is inventory. Current ratio includes inventory in the current asset total while the quick ratio subtracts inventory from current assets before dividing by current liabilities. Since both ratios have the same denominator, any difference between the two must occur in the numerator. In order for the current ratio to decrease while the quick ratio increases, inventory must decrease. A decrease in inventory would result in less total current assets for the current ratio and would result in less being subtracted from current assets for the current ration and would result in less being subtracted from current assets when calculating the quick ratio