Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington....
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Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington. Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 81 markets. Starbucks financial statements are provided in the supplementary material file. Earnings Quality and Earnings Management a. Compute a ratio from the financial statements based on CFO and NI which helps detect early warnings signs of earnings management in 2017-2019. Use the most appropriate ratio. Briefly explain where are the differences coming from? (4 points) b. Compute a ratio from the financial statements based on A/R and Sales which helps detect early warnings signs of earnings management in 2017-2019. Use the most appropriate ratio. What trend do you observe in this ratio over the years? (4 points) c. Compute a ratio from the financial statements based on the firm's Bad Debt Expense and Write Offs in 2017-2019. Use the most appropriate ratio. What trend do you observe in this ratio over the years? (4 points) d. Let's assume the table below presents analysts' EPS consensus forecast (Wall St.) and actual EPS for Starbucks. Based on the data from the table, there any early evidence that might suggest Starbucks management is managing earnings? (2 points) EPS Wall St. Actual FO1'17 FO2 '17 0.63 0.63 0.45 0.46 FO3 '17 F04 '17 FO1 '18 FO2 '18 FO3 '18 0.53 0.52 0.53 0.53 0.46 0.47 0.44 0.44 0.63 0.64 F04 '18 0.42 0.44 e. Based on the evidence in (a)-(d) comment whether you believe Starbucks management is managing earnings (4 points) Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington. Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 81 markets. Starbucks financial statements are provided in the supplementary material file. Earnings Quality and Earnings Management a. Compute a ratio from the financial statements based on CFO and NI which helps detect early warnings signs of earnings management in 2017-2019. Use the most appropriate ratio. Briefly explain where are the differences coming from? (4 points) b. Compute a ratio from the financial statements based on A/R and Sales which helps detect early warnings signs of earnings management in 2017-2019. Use the most appropriate ratio. What trend do you observe in this ratio over the years? (4 points) c. Compute a ratio from the financial statements based on the firm's Bad Debt Expense and Write Offs in 2017-2019. Use the most appropriate ratio. What trend do you observe in this ratio over the years? (4 points) d. Let's assume the table below presents analysts' EPS consensus forecast (Wall St.) and actual EPS for Starbucks. Based on the data from the table, there any early evidence that might suggest Starbucks management is managing earnings? (2 points) EPS Wall St. Actual FO1'17 FO2 '17 0.63 0.63 0.45 0.46 FO3 '17 F04 '17 FO1 '18 FO2 '18 FO3 '18 0.53 0.52 0.53 0.53 0.46 0.47 0.44 0.44 0.63 0.64 F04 '18 0.42 0.44 e. Based on the evidence in (a)-(d) comment whether you believe Starbucks management is managing earnings (4 points)
Expert Answer:
Answer rating: 100% (QA)
a Compute the CFONI ratio for 20172019 2017 CFO of 3305NI of 2588 128 2018 CFO of 3593NI of 2822 127 ... View the full answer
Related Book For
Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780134486840
6th Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date:
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