Preparing Comparative Income Statements and Computing Key Ratios

Starbucks Corporation reported the following data in its $2020$ and $201910-$K reports:

$($$ millions$)$ Sept. $27,2020$ Sept. $29,2019$

Total assets $$32,312\mathrm{.}0$ $$20,180\mathrm{.}6$

Total liabilities $39,032\mathrm{.}627,995\mathrm{.}7$

Sales revenue $25,869\mathrm{.}827,834\mathrm{.}0$

Operating expenses $24,151\mathrm{.}923,552\mathrm{.}2$

Other expenses, including income taxes $700\mathrm{.}7507\mathrm{.}5$

a$)$ Prepare income statements for Starbucks Corporation for the years ended September $27,2020,$ and

September $29,2019.$ Use the format illustrated in Exhibit $1\mathrm{.}8.$

STARBUCKS CORPORATION

Income Statements

For years ended Sept $27,2020$ and Sept. $29,2019$

$($$ millions$)$

$20202019$

Answer $1$

Answer $2$

$0$

Answer $3$

$0$

Answer $4$

Answer $5$

$0$

Answer $6$

$0$

Operating income

$0$

$0$

Answer $7$

Answer $8$

$0$

Answer $9$

$0$

Answer $10$

$0$

$0$

b$)$ Compute Starbucks Corporation' return on equity ratio for $2020$ and $2019.$ Starbucks Corporation' stockholders'

equity at September $30,2018,$ was $$1,199\mathrm{.}3$ million. Round percentages to one decimal place.

$2020$ Answer $11$

$0$

$2019$ Answer $12$

$0$

c$)$ Compute Starbucks Corporation' debt$-$to$-$equity ratio for $2020$ and $2019.$ Round to two

decimal places.

$2020$ Answer $13$

$0$

$2019$ Answer $14$

$0$

d$)$ Assume that in $2019,$ Starbucks Corporation reported a lawsuit was in process where plaintiffs allege

that Starbucks Corporation did not inform customers about the chemical acrylamide in their products

$($as required by California law$).$ Starbucks Corporation did not record a liability $($and expense$),$ stating that

the loss was possible but not probable.

What would Starbucks Corporation' ROE have been if it had accrued a $$2,040$ million litigation

liability $($and expense$)?$ Round percentage to two decimal places.

Answer $15$

$0$

$\%$