a. Calculate Starbucks NOPAT for the fiscal year ended October 3, 2021.

b. Calculate Starbucks ROA, ROE and ROFL for the fiscal year ended October 3, 2021. Are there any complications in interpreting and calculating ROE and ROFL? If so, what are the complications, and how do they affect how you interpret the ratios?

c. You are a junior analyst for a bank and have been tasked with evaluating the refinancing of Starbucks long-term debt. Calculate Starbucks current ratio, debt-to-equity, and times-interest-earned ratio. Do you recommend refinancing Starbucks debt? Explain your decision, including any other factors not captured by the ratios that should be considered

LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|l|}{ Current liabilities: } \\ \hline Accounts payable & $ & 1,211.6 & $ & 997.9 \\ \hline Accrued liabilities & & 1,973.2 & & 1,160.7 \\ \hline Accrued payroll and benefits & & 772.3 & & 696.0 \\ \hline Income taxes payable & & 348.0 & & 98.2 \\ \hline Current portion of operating lease liability & & 1,251.3 & & 1,248.8 \\ \hline Stored value card liability and current portion of deferred revenue & & 1,596.1 & & 1,456.5 \\ \hline Short-term debt & & - & & 438.8 \\ \hline Current portion of long-term debt & & 998.9 & & 1,249.9 \\ \hline Total current liabilities & & 8,151.4 & & 7,346.8 \\ \hline Long-term debt & & 13,616.9 & & 14,659.6 \\ \hline Operating lease liability & & 7,738.0 & & 7,661.7 \\ \hline Deferred revenue & & 6,463.0 & & 6,598.5 \\ \hline Other long-term liabilities & & 737.8 & & 907.3 \\ \hline Total liabilities & & 36,707.1 & & 37,173.9 \\ \hline \multicolumn{5}{|l|}{ Shareholders' deficit: } \\ \hline Commonstock($0.001parvalue)-authorized,2,400.0shares;issuedandoutstanding,1,180.0and1,173.3shares,respectively & & 1.2 & & 1.2 \\ \hline Additional paid-in capital & & 846.1 & & 373.9 \\ \hline Retained deficit & & (6,315.7) & & (7,815.6) \\ \hline Accumulated other comprehensive income/(loss) & & 147.2 & & (364.6) \\ \hline Total shareholders' deficit & & (5,321.2) & & (7,805.1) \\ \hline Noncontrolling interests & & 6.7 & & 5.7 \\ \hline Total deficit & & (5,314.5) & & (7,799.4) \\ \hline TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) & $ & 31,392.6 & $ & 29,374.5 \\ \hline \end{tabular} STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Year Euded Oct 3, 2021 Sep 27,2020 OPERATING ACTIVITIES: Net eamings including noncontrolling interests $ 4,200.3$ 924.7 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 1,524.1 1,503.2 Deferred income taxes, net (146.2) (25.8) Income earned from equity method investees (347.3) (280.7) Distributions received from equity method investees 336.0 227.7 Net gain resulting from divestiture of certain operations (864.5) Stock-based compensation 319.1 248.6 Goodwill impaiments Non-cash lease cost 1,248.6 1,197.6 Loss on retirement and impairment of assets 226.2 454.4 Other (6.0) 24.5 Cash provided by/(used in) changes in operating assets and liabilities: \begin{tabular}{|lrr|} \hline Accounts receivable & (43.0) & (2.7) \\ \hline InventoriesPrepaidexpensesandothercurrent & (49.8) & (10.9) \\ \hline assets & 251.1 & (317.5) \\ \hline Income taxes payable & 286.1 & (1,214.6) \\ \hline Accounts payable & 189.9 & (210.8) \\ \hline Deferred revenue & (6.1) & 31.0 \\ \hline Operating lease liability & (1,488.1) & (1,231.4) \\ \hline Other operating assets and liabilities & 358.7 & 280.5 \\ \hline Net cash provided by operating activities & 5,989.1 & 1,597.8 \end{tabular} Continued on next page. STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (in millions, except per share data) INVESTING ACTIVITIES: \begin{tabular}{|c|c|c|} \hline Purchases of investments & (432.0) & (443.9) \\ \hline Sales of investments & 143.2 & 186.7 \\ \hline Maturities and calls of investments & 345.5 & 73.7 \\ \hline Additions to property, plant and equipment & (1,470.0) & (1,483.6) \\ \hline Netproceedsfromthedivestitureofcertainoperations & 1,175.0 & - \\ \hline Other & (81.2) & (44.4) \\ \hline Net cash used in investing activities & (319.5) & (1,711.5) \\ \hline \multicolumn{3}{|l|}{ FINANCING ACTTVITIES: } \\ \hline Repayments of commercial paper & (296.5) & - \\ \hline Proceeds from issuance of short-term debt & 215.1 & 1,406.6 \\ \hline Repayments of short-term debt & (349.8) & (967.7) \\ \hline Proceeds from issuance of long-term debt & - & 4,727.6 \\ \hline Repayments of long-term debt & (1,250.0) & - \\ \hline Proceeds from issuance of common stock & 246.2 & 298.8 \\ \hline Cash dividends paid & (2,119.0) & (1,923.5) \\ \hline Repurchase of common stock & - & (1,698.9) \\ \hline Minimumtaxwithholdingsonshare-basedawards & (97.0) & (91.9) \\ \hline Other & - & (37.7) \\ \hline Netcashprovidedby/(usedin)financingactivities & (3,651.0) & 1,713.3 \\ \hline Effectofexchangeratechangesoncashandcashequivalents & 86.2 & 64.7 \\ \hline Netincrease/(decrease)incashandcashequivalents & 2,104.8 & 1,664.3 \\ \hline \end{tabular} \begin{tabular}{l|ccc|} Fiscal Yesr Foded & Oct 3, 2021 & \multicolumn{2}{c}{ Sep 27, 2020 } \\ \hline Statutory tax rate & 21.0 & % & 21.0 \end{tabular} LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|l|}{ Current liabilities: } \\ \hline Accounts payable & $ & 1,211.6 & $ & 997.9 \\ \hline Accrued liabilities & & 1,973.2 & & 1,160.7 \\ \hline Accrued payroll and benefits & & 772.3 & & 696.0 \\ \hline Income taxes payable & & 348.0 & & 98.2 \\ \hline Current portion of operating lease liability & & 1,251.3 & & 1,248.8 \\ \hline Stored value card liability and current portion of deferred revenue & & 1,596.1 & & 1,456.5 \\ \hline Short-term debt & & - & & 438.8 \\ \hline Current portion of long-term debt & & 998.9 & & 1,249.9 \\ \hline Total current liabilities & & 8,151.4 & & 7,346.8 \\ \hline Long-term debt & & 13,616.9 & & 14,659.6 \\ \hline Operating lease liability & & 7,738.0 & & 7,661.7 \\ \hline Deferred revenue & & 6,463.0 & & 6,598.5 \\ \hline Other long-term liabilities & & 737.8 & & 907.3 \\ \hline Total liabilities & & 36,707.1 & & 37,173.9 \\ \hline \multicolumn{5}{|l|}{ Shareholders' deficit: } \\ \hline Commonstock($0.001parvalue)-authorized,2,400.0shares;issuedandoutstanding,1,180.0and1,173.3shares,respectively & & 1.2 & & 1.2 \\ \hline Additional paid-in capital & & 846.1 & & 373.9 \\ \hline Retained deficit & & (6,315.7) & & (7,815.6) \\ \hline Accumulated other comprehensive income/(loss) & & 147.2 & & (364.6) \\ \hline Total shareholders' deficit & & (5,321.2) & & (7,805.1) \\ \hline Noncontrolling interests & & 6.7 & & 5.7 \\ \hline Total deficit & & (5,314.5) & & (7,799.4) \\ \hline TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) & $ & 31,392.6 & $ & 29,374.5 \\ \hline \end{tabular} STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Year Euded Oct 3, 2021 Sep 27,2020 OPERATING ACTIVITIES: Net eamings including noncontrolling interests $ 4,200.3$ 924.7 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 1,524.1 1,503.2 Deferred income taxes, net (146.2) (25.8) Income earned from equity method investees (347.3) (280.7) Distributions received from equity method investees 336.0 227.7 Net gain resulting from divestiture of certain operations (864.5) Stock-based compensation 319.1 248.6 Goodwill impaiments Non-cash lease cost 1,248.6 1,197.6 Loss on retirement and impairment of assets 226.2 454.4 Other (6.0) 24.5 Cash provided by/(used in) changes in operating assets and liabilities: \begin{tabular}{|lrr|} \hline Accounts receivable & (43.0) & (2.7) \\ \hline InventoriesPrepaidexpensesandothercurrent & (49.8) & (10.9) \\ \hline assets & 251.1 & (317.5) \\ \hline Income taxes payable & 286.1 & (1,214.6) \\ \hline Accounts payable & 189.9 & (210.8) \\ \hline Deferred revenue & (6.1) & 31.0 \\ \hline Operating lease liability & (1,488.1) & (1,231.4) \\ \hline Other operating assets and liabilities & 358.7 & 280.5 \\ \hline Net cash provided by operating activities & 5,989.1 & 1,597.8 \end{tabular} Continued on next page. STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (in millions, except per share data) INVESTING ACTIVITIES: \begin{tabular}{|c|c|c|} \hline Purchases of investments & (432.0) & (443.9) \\ \hline Sales of investments & 143.2 & 186.7 \\ \hline Maturities and calls of investments & 345.5 & 73.7 \\ \hline Additions to property, plant and equipment & (1,470.0) & (1,483.6) \\ \hline Netproceedsfromthedivestitureofcertainoperations & 1,175.0 & - \\ \hline Other & (81.2) & (44.4) \\ \hline Net cash used in investing activities & (319.5) & (1,711.5) \\ \hline \multicolumn{3}{|l|}{ FINANCING ACTTVITIES: } \\ \hline Repayments of commercial paper & (296.5) & - \\ \hline Proceeds from issuance of short-term debt & 215.1 & 1,406.6 \\ \hline Repayments of short-term debt & (349.8) & (967.7) \\ \hline Proceeds from issuance of long-term debt & - & 4,727.6 \\ \hline Repayments of long-term debt & (1,250.0) & - \\ \hline Proceeds from issuance of common stock & 246.2 & 298.8 \\ \hline Cash dividends paid & (2,119.0) & (1,923.5) \\ \hline Repurchase of common stock & - & (1,698.9) \\ \hline Minimumtaxwithholdingsonshare-basedawards & (97.0) & (91.9) \\ \hline Other & - & (37.7) \\ \hline Netcashprovidedby/(usedin)financingactivities & (3,651.0) & 1,713.3 \\ \hline Effectofexchangeratechangesoncashandcashequivalents & 86.2 & 64.7 \\ \hline Netincrease/(decrease)incashandcashequivalents & 2,104.8 & 1,664.3 \\ \hline \end{tabular} \begin{tabular}{l|ccc|} Fiscal Yesr Foded & Oct 3, 2021 & \multicolumn{2}{c}{ Sep 27, 2020 } \\ \hline Statutory tax rate & 21.0 & % & 21.0 \end{tabular}