Part 1

Use the EDGAR | Company Filings (Links to an external site.)or Yahoo! Finance(Links to an external site.)database to download the last 10-Q from Starbucks into Excel. Use the downloaded data to complete the Income Statement and Balance Sheet on the appropriate tabs in an excel spreadsheet. Assume the following:

• Sales will increase for the next quarter by the same percentage increase from the previous quarter to the last reported quarter. For example, if sales increased 8% from the last quarter to the current reported quarter, you will use 8% as the sales increase for your pro formas.

Calculate the expenses to determine what will change and what will remain the same.

Note: Not all costs are associated with the cost of sales. It will be up to you to determine which line items need to be increased and which ones need to be left alone. This will require you to distinguish between fixed and variable costs. For a reminder of the difference between fixed and variable costs, please watch the video Business Costs (Fixed Costs and Variable Costs) Explained (Links to an external site.).

Within each line item expense explain your rationale, as well as provide a brief summary.