Question
Between about December 2007 and June 2009, the United States was considered to be in a recession. The U.S. Gross Domestic Product fell approximately 3%
Between about December 2007 and June 2009, the United States was considered to be in a recession. The U.S. Gross Domestic Product fell approximately 3% from the third quarter of 2008 to the third quarter of 2009. Also, during December 2007 and June 2009, the Standard and Poors 500 index dropped by 38% and the unemployment rate climbed from 5% to 9.5%.
The macroeconomic situation affected almost all companies since higher unemployment affected personal consumption, which dropped from 10,140.3 Billion Dollars in Aug 2008 to 9,807 Billion Dollars in June 2009, a drop of 3.8 percent.
Starbucks is one of the companies affected by the December 2007 recession. The following table shows several ratios for Starbucks corresponding to the years 2006, 2007, and 2008. Use a stock price of 10.9 dollars per share for the year 2009.
Year | 2006 | 2007 | 2008 |
ROE | 0.253 | 0.294 | 0.127 |
ROA | 0.106 | 0.126 | 0.056 |
ROIC | 0.207 | 0.250 | 0.121 |
asset turnover | 1.758 | 1.761 | 1.830 |
op. profit margin | 0.115 | 0.746 | 0.048 |
long term debt ratio | 0.0009 | 0.241 | 0.221 |
D/E ratio | 0.987 | 1.340 | 1.277 |
current ratio | 0.970 | 0.787 | 0.798 |
quick ratio | 0.462 | 0.466 | 0.482 |
payout ratio | 0.000 | 0.000 | 0.000 |
plowback ratio | 1.000 | 1.000 | 1.000 |
market to book ratio | 6.088 | 3.099 | 1.374 |
stock price used for market/book | 17.71 | 9.450 | 4.68 |
By using the financial statements provided, calculate the ratios presented in the table for the year 2009
Item 8. Financial Statements and Supplementary Data STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (In Millions, except earnings per share). Sep 27, 2009 Sep 28, 2008 Sep 30, 2007 $8,180.1 $ 8,771.9 $7,998.3 1,171.6 439.5 1,611.1 10,383.0 4 ,645. 3 3,745.1 330.1 549.3 456,0 1,026.3 386.9 1,413.2 9,411.5 3.999.1 3,215.9 294.2 467.2 489.2 Fiscal Year Ended Net revenues: Company-operated retail ... ........ Specialty: Licensing ........... Foodservice and other. ...... Total specialty ............. Total net revenues ...................... Cost of sales including occupancy costs... Store operating expenses .... Other operating expenses .................. Depreciation and amortization expenses ..... General and administrative expenses Restructuring charges. ................ Total operating expenses..... Income from equity investees...... Operating income ............. Interest income and other, net .... Interest expense. Earnings before income taxes .. Income taxes .......... Net earnings............ Per common share: Net earnings basic ... Net earnings - diluted. ....................... Weighted average shares outstanding: 1,222.3 372.2 1,594.5 9,774.6 4,324. 9 3,425.1 264.4 534.7 453.0 332.4 9,334.5 121.9 562.0 36.3 (39.1) 559.2 168.4 $ 390.8 266.9 9,992.7 113.6 503.9 9.0 (53.4) 459.5 144.0 315.5 8,465.6 108.0 1,053.9 40.4 (38.0) 1,056.3 383.7 $ 672.6 $ $ $ 0.53 0.52 $ $ 0.43 0.43 $ $ 0.90 0.87 Basic ............................................ 738.7 745. 9 731.5 7 41.7 749.8 770.1 Diluted ............................... Sep 27, 2009 Sep 28, 2008 ASSETS Current assets: Cash and cash equivalents ....... Short-term investments - available-for-sale securities Short-term investments -- trading securities Accounts receivable, net..... Inventories .......................... Prepaid expenses and other current assets. Deferred income taxes, net .... Total current assets .......... Long-term investments available-for-sale securities. ... Equity and cost investments. Property, plant and equipment, net ...... Other assets........ Other intangible assets ... Goodwill...... TOTAL ASSETS ......... $ 599.8 21.5 44.8 271.0 664.9 147.2 286.6 2,035.8 71.2 352.3 2,536.4 253.8 68.2 259.1 $5,576.8 S 269.8 3.0 49.5 329.5 692.8 169.2 234.2 1,748.0 71.4 302.6 2,956.4 261.1 66.6 266.5 $5,672.6 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Commercial paper and short-term borrowings ....... .... $ - Accounts payable............... 267.1 Accrued compensation and related costs .. 307.5 Accrued occupancy costs.. 188.1 Accrued taxes ............. 127.8 Insurance reserves .... 154.3 Other accrued expenses. 147.3 Deferred revenue ........... 388.7 Current portion of long-term debt 0.2 Total current liabilities ........ 1,581.0 Long-term debt ............. 549.3 Other long-term liabilities ..... 400.8 Total liabilities. 2,531.1 Shareholders' equity: Common stock ($0.001 par value) - authorized, 1,200.0 shares, issued and outstanding, 742.9 and 735.5 shares, respectively includes 3.4 common stock units in both periods) ................... Additional paid-in capital ....... 147.0 Other additional paid-in-capital. ........ 39.4 Retained earnings.......................... 2,793.2 Accumulated other comprehensive income ............ 65.4 Total shareholders' equity..... 3,045.7 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ....... $5,576.8 $ 713.0 324,9 253.6 136.1 76.1 152.5 164.4 368.4 0.7 2,189.7 549.6 442.4 3,181.7 0.7 0.7 39.4 2,402,4 48.4 2,490.9 $5,672,6 Other ....... A ccrued taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sep 27, Sep 28, Sep 30, Fiscal Year Ended 2008 2007 OPERATING ACTIVITIES: Net carnings ................ ...... ...........$ 390.8 $ 315.5 $ 672.6 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization ....... 563.3 604.5 491.2 Provision for impairments and asset disposals ........ 224.4 325.0 26.0 Deferred income taxes .................... (69.6) (117.1) (37.3) Equity in income of investees .............. (78.4) (61.3) (65.7) Distributions of income from equity investees ..... 53.0 52.6 65.9 Stock-based compensation ................... 83.2 75.0 103.9 Tax benefit from exercise of stock options .......... 2.0 3.8 7.7 Excess tax benefit from exercise of stock options ...... (15.9) (14.7) (93.1) 5.4 (0.1) 0.7 Cash provided/(used) by changes in operating assets and liabilities: Inventories...... 28.5 (0.6) (48.6) Accounts payable .. (53.0) (63.9) 36.1 57.2 7.3 86.4 Deferred revenue ..., 16.3 72.4 63.2 Other operating assets .......... 120.5 (11.2) (92.7) Other operating liabilities ....... 61.3 71.5 114.9 Net cash provided by operating activities. 1,389.0 1,258.7 1,331.2 INVESTING ACTIVITIES: Purchase of available-for-sale securities ....... (129.2) (71.8) (237.4) Maturities and calls of available-for-sale securities. ..... 111.0 20.0 178.2 Sales of available-for-sale securities ... 5.0 75.9 47.5 Acquisitions, net of cash acquired ............... (74.2) (53.3) Net purchases of equity, other investments and other assets.. (4.8) (52.0) (56.6) Additions to property, plant and equipment ........ (445.6) (984.5) (1,080.3) Proceeds from sale of property, plant and equipment .......... 42.5 Net cash used by investing activities (421.1) (1,086.6) (1,201.9) FINANCING ACTIVITIES: Proceeds from issuance of commercial paper ...... 20,965.4 65,770.8 17,311.1 Repayments of commercial paper ........ (21,378.5) (66,068.0) (16,600.9) Proceeds from short-term borrowings ..... 1,338.0 528.2 770.0 Repayments of short-term borrowings... (1,638.0) (228.8) (1,470.0) Proceeds from issuance of common stock ...... 57.3 112.3 176.9 Excess tax benefit from exercise of stock options .... 15.9 14.7 93.1 Proceeds from issuance of long-term debt. 549.0 Principal payments on long-term debt...... (0.7) (0.6) (0.8) Repurchase of common stock ............ (311.4) (996.8) Other ................... ......... (1.6) (1.7) .. (3.5) Net cash used by financing activities ......, (642.2) (184.5) (171.9) Effect of exchange rate changes on cash and cash equivalents 4.3 0.9 11.3 Net increase/(decrease) in cash and cash equivalents .............. 330.0 (11.5) (31.3) CASH AND CASH EQUIVALENTS: Beginning of period. ......................................... ... 269.8 281.3 312.6 End of period ...... $ 599.8 $ 269.8 $ 281.3 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Net change in short-term borrowings and commercial paper for the period. ........ $ (713.1) $ 2.2 $ 10.2 Cash paid during the period for: Interest, net of capitalized interest ....... .......$ 39.8 $ 52.7 $ 35.3 Income taxes .............. S 162.0 $ 259.5 $ 342.2 aa a@g **888-as 341331 32-014 12g222*1*822 23 24 agg | STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions) Cominon Stock STOCK Shares Amount 756,6 $0.7 Other Additional Additional Paid-in Paid-in Capital Capital $ -- $39.4 Retained Earnings $2,151.1 672.6 Accumulated Other Comprehensive Income/(Loss) $ 37.3 Total $ 2,228.5 672.6 (20.4) 37.7 689.9 (20.4) 37.7 III 106.4 106.4 12.8 225.2 225.2 46.8 (378.4) $ - (634.3) $2,189.4 46.8 (1,012.7) $ 2,284.1 $39.4 $ 54.6 (3.3) (1.7) 315.5 . 315.5 0.8 (7.0) . . Balance, October 1, 2006 ......... Net carnings...... Unrealized holding loss, net....... Translation adjustment, net of tax Comprehensive income ............ Stock-based compensation expense...... Exercise of stock options, including tax benefit of $95.3. ................... Sale of common stock, including tax provision of $0.1........ Repurchase of common stock ............ Balance, September 30, 2007.............. Cumulative impact of adoption of accounting requirements for uncertain tax positions ... Net earnings..................... Unrealized holding gain, net......... Translation adjustment, net of tax ..... Comprehensive income .............. Stock-based compensation expense ........ Exercise of stock options, including tax benefit of $8.4 .. Sale of common stock, including tax benefit of $0.1........... Repurchase of common stock. ....... Balance, September 28, 2008. ...... Net earnings. ................ Unrealized holding gains, net ........ Translation adjustment, net of tax .... Comprehensive income ............. Stock-based compensation expense ..... Exercise of stock options, including tax benefit of $5.3 .. Sale of common stock, including tax benefit of $0.1........................ Balance, September 27, 2009......... . 309.3 76.8 76.8 77.4 77.4 II III II II III 41.9 (194.5) $39.4 (100.8) $2,402.4 390.8 $ 48.4 $ 40. 1.8 41.9 (295.3) $ 2,490.9 390.8 1.8 15.2 407.8 84.3 15.2 84.3 35.9 35.9 26.8 26.8 $ 147.0 $39.4 $2,793.2 65.4 $ 3,045.7
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started