Calculate the following Solvency ratios for the Starbucks Corporation for both 2019 and 2020. Provide an analysis of what these ratios reveal about the Starbucks Corporation's ability to meet its long-term obligations. (See pgs. 508 - 509 in your textbook). Debt to Equity Ratio Times Interest Earned STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS fin millions, excepe per share data) Sep 27. 1020 Sep 29. 2019 Sep 30, 2018 Fiscal Year Ended Net revenues: Company-operated stores Licensed stores Other Total net revenues Product and distribution costs 19.164.6 $ 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 22,278.8 322.5 1.561.7 21,544.4 $ 2,875.0 2.089.2 26,5086 8,526,9 10,493.6 371.0 1,3773 1.824.1 135.8 22,728.7 2980 4,077.9 19,6903 2,6522 2.377.0 24,719.5 7,930.7 9,4722 3549 1.247.0 1,708,2 2244 21.137.4 301.2 3.883.3 1,376,4 499.2 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 earnings including noncontrolling interests Net loss attributable to noncontrolling interests Net earnings attributable to Starbucks Earnings per share - basic Earnings per share-diluted Weighted average shares outstanding Basic Diluted 39.7 (4370) 1.164.4 239.7 6228 96.5 (331.0) 4.466.2 871.6 3,594.6 (4.6) 3,599.2 S 191.4 (1703) 5.780.0 1.262.0 4,518.0 (03) 4,518.3 924,7 (3.6) 9283 S 0.79 $ 0.79 $ 2.99 $ 2.925 3.27 3.24 1.172.8 1.181.8 1.221.2 1.233.2 1,382.7 1,394,6 STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Sep 27. 2020 Sep 30, 2018 Sep 29. 2019 3,594,6 5 924.7 S 4.518.0 83 (1.8) (126.3) 10.5 (2.3) (14.1) (7.0) 1.9 24.4 313 3.4 (39.8) 38.7 (9.8) 10.1 Fiscal Year Ended Net earnings including noncontrolling interests Other comprehensive income (loss), net of tax Unrealized holding gains/losses) on available-for-sale securities Tax (expense) benefit Unrealized gains/losses) on cash flow hedging instruments Tax (expense) benefit Unrealized gains:(losses) on net investment hedging instruments Tax (expense) benefit Translation adjustment and other Tax (expense) benefit Reclassification adjustment for net (gains) losses realized in net carnings for available- for-sale securities, hedging instruments and translation adjustment Tax expense (benefit) Other comprehensive income (loss) Comprehensive income including noncontrolling interests Comprehensive income/(loss) attributable to noncontrolling interests Comprehensive income attributable to Starbucks (6.5) 7.8 (2.2) (220.0) 3.4 206.9 (1462) 2.5 IS 1.3 24.7 1.6 (20.1) 5.2 133.9 1,058.6 (3.6) 1,0622 (173.0) 3,421.6 (4.6) 3,426,2 (1.2) (1747) 4,3433 (0.3) 4,343,6 STARBUCKS CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except per share data) Sep 27. 2020 Sep 29, 2019 ASSETS 4,3509 s 281.2 2,686.6 70.5 883.4 1.551.4 739.5 8792 1,529.4 4882 5,6539 220.0 396.0 6,431.7 7,8064 206.1 478.7 6,241.4 8,134.1 1,789.9 568.6 552.1 3,5972 29,374.55 1.765.8 479,6 781,8 3.490,8 19,219.6 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 ($0.001 par value) -authorized, 2,400.0 shares, 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 1.7537 6646 1,2917 1,269.0 997.9 5 1,160,7 696.0 98.2 1,248.8 1.456.5 4388 1.249.9 7,346.8 14,6596 7.661.7 6,598.5 907.3 37,173.9 6.168.7 11,167.0 6,744.4 1,370.5 25,4506 1.2 1.2 41.1 373.9 (7.815,6) (364.6) (7.805.1) 5.7 (7.799.4) 29,374.5 s (5.771.2) (503.3) (6,2322) 1.2 (6.231.0) 19.219.6 See Notes to Consolidated Financial Statements STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS fin million) Sep 27, 3120 Sep en Sep 30, S018 S 9247 3.5916 4.5180 1,503.2 (25) (280.7) 227.7 1.4493 (1.1954) 0506 2168 1.3059 7149 (2428) 2258 (1376,4) (499.21 2503 37.6 2486 308,0 105 1.1976 4544 245 75.6 13.4 453 131.0 (412) (839.5) (27) (10.93 (317-5) (1.2146) (210.8) 310 (1.231.4) 2805 1.5978 (1977) (1730) 9220 2371 31.9 005) 150 3936 7,109.4 16.4 (1411) 5.0470 11.9378 Fiscal Year Ends OPERATING ACTIVITIES Net earnings including noncontrolling interests Adjustments to reconcile net carnings to net cash provided by operating activities Depreciation and amortization Deferred income taxes, act Income carned from equity method investees Distributions received from equily method investees Gain resulting from acquisition of joint venture Net gain resulting from divestitute of certain retail operations Stock based compensation Goodwill impairments Noo-cash lease cost Loss on retirement and impairment of assets Other Cash provided by used in changes in operating assets and liabilities. Accounts receivable Inventories Prepaid expenses and other current assets Income taxes payable Accounts payable Deferred revenue Operating lease liability Other operating assets and liabilities Net cash provided by operating activities INVESTING ACTIVITIES: Purchases of investments Sales of investments Maturities and calls of investments Acquisitions, net of cash acquired Additions to property, plant and equipment Net proceeds from the divestiture of certain operations Other Net cash used in investing activities FINANCING ACTIVITIES Proceeds from issuance of short-term det Repayments of short-term deht Proceeds from issuance of long-term det Repayments of long-term deht Proceeds from issuance of common stock Cash dividends paid Repurchase of common stock Minimum tax withholdings on share-based awards Other Net cash provided by used in) financing activities Effect of exchange rate changes on cash and cash equivalents Not increase (decreasc) in cash and cash equivalents CASH AND CASH EQUIVALENTS: Beginning of period End of period (443.99 1867 (1994) 2983 59 73.7 (1919 499.0 453 (1 311.3) (1.976,4) 608.2 (1.483.6) (1066) 6843 (562) (1.010.) (444) (1.711.5) 56 (2.361.5) 1.4066 (967.7) 4,7226 5.5881 1539 2988 (1.9235) (1.6989) 1919 (377) 1.713.3 647 1.6643 1.996.0 (3500) 409,8 (1.761.3) (10.223) (1116) (175) (10,05693 (49.03 (6.069.71 (1.7434) (7.133.5) (627) (412) (3.24281 (395) 6,2940 7563 2.6866 43509 2.4623 8.7563 2,6866 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for Interest, net of capitalized interest Income taxes 299.5 s 137.1 39695 1,699.15 47015 1.1769 See Notes to Consolidated Financial Statements