1. Of the 15 risks that Starbuck's management discloses, which one do you think could most adversely affect the balance sheet and why? 2. Of the 15 risks that Starbuck's management discloses, which one do think could most you adversely affect the income statement and why? 3. Of the 15 risks that Starbuck's management discloses, which one do you think could most adversely affect the Cash Flow Statement and why? 4. Risk number 10 above states "Increases in the cost of high-quality arabica coffee beans or other commodities or decreases in the availability of high-quality arabica coffee beans or other commodities could have an adverse impact on our business andfinancial results." Which ratios would be adversely affected if increases in cost or supply chain disruptions occurred for arabica beans? Explain why 5. Compare your readings of management's assertions and your findings of your vertical, horizontal, ratio and chart analysis. Discrepancies may ex indicating and what management is telling you. Is management telling the public one thing, but the financial information indicates another? Explain to the best of your ability between what the ratios are To help you answer this question read the following. Form 10-Ks normally follow specific patterns. It is important to read all three years (2016, 2017 and 2018) to see how management modifies its discussion from year to year. The specific narrative in each section generally does not change too much unless new disclosure requirements or other laws/policies/procedures are enacted. This is often a company's achilles heel. If management is telling the public a similar narrative each year, the charts should show a 17 Starbucks identifies the following 15 material risks: 1 Economic conditions in the US and international markets could adversely affect our business and financial results. 2. Our success depends substantially on the value of our brands and failure to preserve their value, either through our actions or those of our business partners, could have a negative impact on our financial results. 3. Incidents involvingfood or beverage-borne illnesses, tampering, adulteration, contamination or mislabeling, whether or not accurate, as welll as adverse public or medical opinions about the health eflects of consuming our products, could harm our business 4. The unauthorized access, use, the ft or destruction of customer or employce personal, financial or other data or of Starbucks proprietary or confidential information that is stored in our information systems or by third parties on our behalf could impact our reputation and brand and expose us to potential liability and loss of revenues. 5. We rely heavily on information technology in our operations and growth initiatives, and any material failure, inadequacy, interruption or securityfailure of that technology could harm our ability to effectively operate and grow our business andcould adversely affect our financial results. 6. We may not be successful in implementing important strategic initiatives or effectively managinggrowth, which may have an adverse impact on our business and financial results. 15 7. We face intense competition in each of our channels and markets, which could lead to reduced profitability 8. We are highly dependent on the financial performance of our Americas operating segment. 9. We are increasingly dependent on the success of certain international markets in order to achieve our growth targets 10. Increases in the cost of high-quality arabica coffee beans or other commodities or decreases in the availability of high-quality arabica coffee beans or other commodities could have an adverse impact on our business andfinancial results. 11. Our financial condition and results of operations are sensitive to, and may be adversely affected by, a number of factors, many of which are largely outside our control. 12. Interruption of our supply chain could affect our ability to produce or deliver our products and could negatively impact our business and profitability 13. Failure to meet market expectations for our financial performance andfluctuations in the stock market as a whole willlikely adversely afffect the market price and volatility of our stock 14.The loss of key personnel or difficulties recruiting and retaining qualified personnel could adversely impact our business andfinancial results. 15. Failure to comply with applicable laws and changing legal and regulatory requirements could harm our business andfinancial results