1a-2b

Ch7 Case Study Assignment - Part 1 (Income Statement Analysis) 1 la: Provide the Total (Net) Revenues. Gross Profit, and Net Income (Loss) from the Income Statement for both 2020 and 2019. Compute the increase or decrease) between these years. Income Statement Amounts Increase 2020 2019 (Decreas) Total Revenues SO Gross Profit SO Net Income (Loss) SO 1b: Provide one Revenue account and two Expense accounts from the Income Statement for both 2020 and 2019. Compute the increase or decrease) between these years, Income Statement Accounts 2020 2019 Increase Desas) Input revenue account here Input expense account here Input expense account here SO SO SO Ic: Compute the Gross Profit Rate and the Profit Margin for both 2020 and 2019. Compute the increase/decrease) between these years. Profitability Ratios 2019 Increase (Decrease) Gross Profit Rate Profit Margin 0.0% 0.074 2. Instructions for Posting (200 to 300 words - 6pts): 2. Provide an explanation for the operating activities on the Income Statement: 1- Describe the "One" Operating Activity revenue account and the "Two Operating Activity expense accounts that you listed above from the Income Statement, 2. Based on your results for la, lb, and le for 2020 and 2019, explain two reasons why the company's operating performance profitability) has improved or become worse. 3. Make sure to include the details of your computations for your ratios. Upload and attach your completed excel file to your posting, b. Why would you recommend for the company to implement either "Establishment of Responsibility" OR "Segregation of Duties as an Internal Control: 1- Describe the purpose of the internal control. 2. Describe the benefits of the internal control 3. Describe what weaknesses this intemal control will help prevent 4- Why would you recommend for the company to implement this internal control? STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (in millions, except per share data) Sep 27. 2020 Sep 29, 2019 Sep 30. 2018 Escal Year Ended Net revenues: Company-operated stores Licensed stores Other Total net revenues Product and distribution costs Store operating expenses Other operating expenses Depreciation and amortization expenses General and administrative expenses Restructuring and impairments Total operating expenses Income from equity investees Operating income Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain operations Interest income and other net Interest expense Earnings before income taxes Income tax expense Net camnings including noncontrolling interests Net loss attributable to noncontrolling interests Net earnings attributable to Surbucks Earnings per share -- basic Earnings per share-diluted Weighted average shares outstanding Basic Diluted 19.164.6 s 2,327.1 2.026.3 23,518,0 7.694.9 10,764,0 430.3 1.431.3 1.679.6 278.7 22,2788 322.5 1,561.7 21,544.4 2.875.0 2.089.2 26,508,6 8,526,9 10.493.6 371.0 1,377.3 1.824.1 135.8 22,728.7 298.0 4,077.9 19,690,3 2.652.2 2.377.0 24,719.5 7.930.7 9,472.2 554,9 1.247.0 1.7082 224,4 21.137,4 301.2 3.883.3 1.376.4 499.2 191.4 (170.3) 5,780.0 1.262.0 4.518,0 (0.3) 4.518.3 39.7 (437.0) 1,164.4 239.7 924.7 (3.6) 928.3 S 0.79 0.795 622.X 96.5 (331.0) 4,466.2 8716 3,594.6 (4.6) 3,599.2 S 2.955 3.27 3.24 2.92 S 1.172.8 1,181.8 1,221.2 1,233.2 1.382.7 1.394.6 STARBUCKS CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except per share data) Sep 27 2020 Sep 29, 2019 4.350.95 281.2 883.4 1.551.4 7395 7.806.4 206,1 478,7 6,241.4 8.134.1 1.789.9 568.6 552.1 3,5972 29,374,5 s 2.686.6 70.5 879.2 1.529.4 4882 5,653.9 220,0 396,0 6,431.7 1.765.8 479,6 781.8 3.490,8 19.219.6 ASSETS Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Long-term investments Equity investments Property, plant and equipment, net Operating lease, right-of-use asset Deferred income taxes, net Other long-term assets Other intangible assets Goodwill TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable Accrued liabilities Accrued payroll and benefits Income taxes payable Current portion of operating lease liability Stored value card liability and current portion of deferred revenue Short-term debt Current portion of long-term debt Total current liabilities Long-term debt Operating lease liability Deferred revenue Other long-term liabilities Total liabilities Shareholders' deficit: Common stock (50.001 par value) - authorized. 2,400.0 stures; issued and outstanding. 1.173.3 and 1.184.6 shares, respectively Additional paid-in capital Retained deficit Accumulated other comprehensive loss Total shareholders' deficit Noncontrolling interests Total deficit TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) 1.189.7 1.753.7 664.6 1,291.7 1.269,0 997.9 $ 1.160.7 696.0 982 1.248.8 1.456.5 438.8 1.249.9 7.346.8 14,659.6 7.661.7 6,598.5 907.3 37.173.9 6,168,7 11.167,0 6.744.4 1.370.5 25.450,6 1.2 373.9 (7.815.6) (364.6) (7.805.1) 5.7 (7.799.4) 29,374.5 S 1.2 41.1 (5.771.2) (503.3) (6.232.2) 1.2 (6.231.0) 19,219.6 S See Notes to consolidated Financial Statements Sep 24 2014 3.5946 4.5180 1.4493 (1,4954) (2506) 1.3059 T14 242 2263 (1.376,4) (4992 2503 37.6 (225) 30.0 10,5 1426 453 75.6 13.4 (1977) (1730) 9220 1.237.1 319 030.5) 131.0 (412) 43395 1460 3916 7.1094 (141.1) 5.047.0 16.4 11.937 STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS in mo Sep 29, Escal Year Endel 2020 OPERATING ACTIVITIES: Net carnings including noncontrolling interests 924.7 Adjustments to reconcile net caming to net cash provided by operating Activities Depreciation and amortization 1.5032 Deferred income taxes, net (258) Income earned from equity method investees (2807) Distributions received from equity method investes 227.7 Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain retail operations Stock-based compensation 2466 Goodwill impairments Non-cash lease cost 1.1976 Loss on retirement and impairment of assets 4544 Other 24.5 Cash provided by wed in) changes in operating web and liabilities Accounts receivable (27) Inventories (109) Prepaid expenses and other current assets (317.5) Income taxes payable (1.2146) Accounts payable (210) Deferred revenue 31.0 Operating lease liability (1.231.4) Other operating assets and liabilities 2NDS Net cash provided by operating activities 1.597.8 INVESTING ACTIVITIES: Purchases of investments (443.9) Sales of investments 156,7 Maturities and calls of investments 73.7 Acquisitions, net of cash acquired Additions to property, plant and equipment Net proceeds from the divestiture of certain operations Other (444) Net cash used in investing activities (1.711.5) FINANCING ACTIVITIES: Proceeds from issuance of short-term debt 1.406,6 Repayments of short-term det (9677) Proceeds from issuance of long-term debt 4.727.6 Repayments of long-term debt Proceeds from issuance of common stock 2988 Cash dividends paid (1.9235) Repurchase of common stock (1.698,9) Minimum tax withholdings on share-based awards 1919) Other (37.7) Net cash provided by used in) financing activities 1.7133 Effect of exchange rate changes on cash and cash equivalents 64.7 Net increase/decrease) in cash and cash equivalents 1.6643 CASH AND CASH EQUIVALENTS: Beginning of period 2.6866 End of period 4.350.9 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period for: Interest, net of capitalized interest 396.95 Income taxes 1.699.15 (1904) 2983 593 (1919) 4.590 453 (1311) (1.9764 (1065) 6843 56.) (1.010.) 5.6 0.36151 5.554.1 1.996.0 (3500) 409 (1.7613) (10,2223) 1539 (1.7434 (7.133.5) (6227 (412 3.3 (395) 6.2940 (175) (10.056.9 149.00 (6,069.7) 8.7563 2.686.65 2.4623 8.7563 299.55 47015 137.1 1.176.9 Ch7 Case Study Assignment - Part 1 (Income Statement Analysis) 1 la: Provide the Total (Net) Revenues. Gross Profit, and Net Income (Loss) from the Income Statement for both 2020 and 2019. Compute the increase or decrease) between these years. Income Statement Amounts Increase 2020 2019 (Decreas) Total Revenues SO Gross Profit SO Net Income (Loss) SO 1b: Provide one Revenue account and two Expense accounts from the Income Statement for both 2020 and 2019. Compute the increase or decrease) between these years, Income Statement Accounts 2020 2019 Increase Desas) Input revenue account here Input expense account here Input expense account here SO SO SO Ic: Compute the Gross Profit Rate and the Profit Margin for both 2020 and 2019. Compute the increase/decrease) between these years. Profitability Ratios 2019 Increase (Decrease) Gross Profit Rate Profit Margin 0.0% 0.074 2. Instructions for Posting (200 to 300 words - 6pts): 2. Provide an explanation for the operating activities on the Income Statement: 1- Describe the "One" Operating Activity revenue account and the "Two Operating Activity expense accounts that you listed above from the Income Statement, 2. Based on your results for la, lb, and le for 2020 and 2019, explain two reasons why the company's operating performance profitability) has improved or become worse. 3. Make sure to include the details of your computations for your ratios. Upload and attach your completed excel file to your posting, b. Why would you recommend for the company to implement either "Establishment of Responsibility" OR "Segregation of Duties as an Internal Control: 1- Describe the purpose of the internal control. 2. Describe the benefits of the internal control 3. Describe what weaknesses this intemal control will help prevent 4- Why would you recommend for the company to implement this internal control? STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (in millions, except per share data) Sep 27. 2020 Sep 29, 2019 Sep 30. 2018 Escal Year Ended Net revenues: Company-operated stores Licensed stores Other Total net revenues Product and distribution costs Store operating expenses Other operating expenses Depreciation and amortization expenses General and administrative expenses Restructuring and impairments Total operating expenses Income from equity investees Operating income Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain operations Interest income and other net Interest expense Earnings before income taxes Income tax expense Net camnings including noncontrolling interests Net loss attributable to noncontrolling interests Net earnings attributable to Surbucks Earnings per share -- basic Earnings per share-diluted Weighted average shares outstanding Basic Diluted 19.164.6 s 2,327.1 2.026.3 23,518,0 7.694.9 10,764,0 430.3 1.431.3 1.679.6 278.7 22,2788 322.5 1,561.7 21,544.4 2.875.0 2.089.2 26,508,6 8,526,9 10.493.6 371.0 1,377.3 1.824.1 135.8 22,728.7 298.0 4,077.9 19,690,3 2.652.2 2.377.0 24,719.5 7.930.7 9,472.2 554,9 1.247.0 1.7082 224,4 21.137,4 301.2 3.883.3 1.376.4 499.2 191.4 (170.3) 5,780.0 1.262.0 4.518,0 (0.3) 4.518.3 39.7 (437.0) 1,164.4 239.7 924.7 (3.6) 928.3 S 0.79 0.795 622.X 96.5 (331.0) 4,466.2 8716 3,594.6 (4.6) 3,599.2 S 2.955 3.27 3.24 2.92 S 1.172.8 1,181.8 1,221.2 1,233.2 1.382.7 1.394.6 STARBUCKS CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except per share data) Sep 27 2020 Sep 29, 2019 4.350.95 281.2 883.4 1.551.4 7395 7.806.4 206,1 478,7 6,241.4 8.134.1 1.789.9 568.6 552.1 3,5972 29,374,5 s 2.686.6 70.5 879.2 1.529.4 4882 5,653.9 220,0 396,0 6,431.7 1.765.8 479,6 781.8 3.490,8 19.219.6 ASSETS Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Long-term investments Equity investments Property, plant and equipment, net Operating lease, right-of-use asset Deferred income taxes, net Other long-term assets Other intangible assets Goodwill TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable Accrued liabilities Accrued payroll and benefits Income taxes payable Current portion of operating lease liability Stored value card liability and current portion of deferred revenue Short-term debt Current portion of long-term debt Total current liabilities Long-term debt Operating lease liability Deferred revenue Other long-term liabilities Total liabilities Shareholders' deficit: Common stock (50.001 par value) - authorized. 2,400.0 stures; issued and outstanding. 1.173.3 and 1.184.6 shares, respectively Additional paid-in capital Retained deficit Accumulated other comprehensive loss Total shareholders' deficit Noncontrolling interests Total deficit TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) 1.189.7 1.753.7 664.6 1,291.7 1.269,0 997.9 $ 1.160.7 696.0 982 1.248.8 1.456.5 438.8 1.249.9 7.346.8 14,659.6 7.661.7 6,598.5 907.3 37.173.9 6,168,7 11.167,0 6.744.4 1.370.5 25.450,6 1.2 373.9 (7.815.6) (364.6) (7.805.1) 5.7 (7.799.4) 29,374.5 S 1.2 41.1 (5.771.2) (503.3) (6.232.2) 1.2 (6.231.0) 19,219.6 S See Notes to consolidated Financial Statements Sep 24 2014 3.5946 4.5180 1.4493 (1,4954) (2506) 1.3059 T14 242 2263 (1.376,4) (4992 2503 37.6 (225) 30.0 10,5 1426 453 75.6 13.4 (1977) (1730) 9220 1.237.1 319 030.5) 131.0 (412) 43395 1460 3916 7.1094 (141.1) 5.047.0 16.4 11.937 STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS in mo Sep 29, Escal Year Endel 2020 OPERATING ACTIVITIES: Net carnings including noncontrolling interests 924.7 Adjustments to reconcile net caming to net cash provided by operating Activities Depreciation and amortization 1.5032 Deferred income taxes, net (258) Income earned from equity method investees (2807) Distributions received from equity method investes 227.7 Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain retail operations Stock-based compensation 2466 Goodwill impairments Non-cash lease cost 1.1976 Loss on retirement and impairment of assets 4544 Other 24.5 Cash provided by wed in) changes in operating web and liabilities Accounts receivable (27) Inventories (109) Prepaid expenses and other current assets (317.5) Income taxes payable (1.2146) Accounts payable (210) Deferred revenue 31.0 Operating lease liability (1.231.4) Other operating assets and liabilities 2NDS Net cash provided by operating activities 1.597.8 INVESTING ACTIVITIES: Purchases of investments (443.9) Sales of investments 156,7 Maturities and calls of investments 73.7 Acquisitions, net of cash acquired Additions to property, plant and equipment Net proceeds from the divestiture of certain operations Other (444) Net cash used in investing activities (1.711.5) FINANCING ACTIVITIES: Proceeds from issuance of short-term debt 1.406,6 Repayments of short-term det (9677) Proceeds from issuance of long-term debt 4.727.6 Repayments of long-term debt Proceeds from issuance of common stock 2988 Cash dividends paid (1.9235) Repurchase of common stock (1.698,9) Minimum tax withholdings on share-based awards 1919) Other (37.7) Net cash provided by used in) financing activities 1.7133 Effect of exchange rate changes on cash and cash equivalents 64.7 Net increase/decrease) in cash and cash equivalents 1.6643 CASH AND CASH EQUIVALENTS: Beginning of period 2.6866 End of period 4.350.9 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period for: Interest, net of capitalized interest 396.95 Income taxes 1.699.15 (1904) 2983 593 (1919) 4.590 453 (1311) (1.9764 (1065) 6843 56.) (1.010.) 5.6 0.36151 5.554.1 1.996.0 (3500) 409 (1.7613) (10,2223) 1539 (1.7434 (7.133.5) (6227 (412 3.3 (395) 6.2940 (175) (10.056.9 149.00 (6,069.7) 8.7563 2.686.65 2.4623 8.7563 299.55 47015 137.1 1.176.9