Presented below are the comparative financial statements of Starbucks Corporation and related ratios:

Starbucks Corporation

Consolidated Balance Sheets

September 28, 2016, and September 30, 2015

(Dollar amounts in millios) 20162015 Increase (Decrease)__

AssetsAmountPercentage

Current Assets:

Cash and cash equivalents$269.8$281.3$(11.5)(4.1)

Shrt-term Investments52..5 157.4(104.9)(66.6)

Accounts receivable, net329.5 287.941.614.4

Inventories 692.8691.71.10.2

Prepaid and other current assets 169.2 14.820.413.7

Deferred income taxes net 234.2129.4104.881.0

Total Current assets$1,748.0 $1,696.5 $51.53.0

Long-term investments374.0 279.9 94.133.6

Property, plant equipment, net 2,956.4 2,890.4 66.02.3

Other assets261.1 219.4 41.719.0

Other intangable assets66.642.1 24.558.2

Goodwill266.5 215.6 50.923.6

Total Assets$5,672.6 $5,3433.9 $328.76.2

Liabilities and Shareholder's Equity

Current liabilities:

Commercial paper and short-term

borrowings $713.0$710.3$2.70.4

Accounts payable 324.9390.8(65.9)(16.9)

Accrued compensation and related 253.6292.4(38.8)(13.3)

costs

Accrued occupancy costs 136.174.661.582.4

Accrued taxes 76.1 92.5(16.4)(17.7)

Insurance reserves 152.5 137.0 15.511.3

Other accrued expenses 164.4160.3 4.12.6

Deferred revenue 38.4296.9 71.524.1

Current portion of long-term debt0.70.8 (0.1)(12.5)

Total current liabilities $2,189.7 $2,155.6 $34.1 1.6

Long-term debt and other liabilities 992.0 904.287.89.7

Shareholder's equity 2,490.92,284.1206.89.1

Total liabilities and shareholder's equity$5,672.6$5,343.9$328.7 6.2

Starbucks Corporation

Consolidated Income Statements

For the Years Ended September 28, 2016, and September 30, 2015

(Dollar amounts in millionsIncrease (Decrease)___

except per share amounts)20162015AmountPercentage

Net revenues$10,383.00$9,411.50$971.50$10.30

Cost of sales, including occupancy costs4,645.33999.1646.216.2

Gross margin$5,737.30$5,412.4 325.3 6

Operating expenses

Store operating expenses$3,745.1$3,215.90 529.2 16.5

Other operating expenses330.1294.235.9 12.2

Depreciation and amortization

expenses549.3467.282.117.6

General and administrative expense 456489.2-33.2-6.8

Restructuring charges266.9--266.9100

Total operating expenses5347.44466.5880.919.7

Operating income$390.3$945.690555.6-58.7

Other income, net122.6148.4 -25.8-17.4

interest expense-53.4-38-15.4 40.5

Income before taxes$459.5$1056.3-596.8-56.5

Provision for income taxes144383.7-239.7-62.5

Income before cumulative change, net

of taxes$315.5$672.6-357.1 -53.1

Cumulative effect of accounting

change, net of taxes------0

Net Income$315.5 $672.6 -357.1 -53.1

Per common share:

Net income per common share before

cumulative of change in

accountingprinciple-basic0.430.9-0.47-52.2

Cumulative effect of accounting

change, net of taxes------0

Net income per common share- basic0.430.9-0.47-52.2

Net income per common share before

cumulative effect of change in

accounting principle-- diluted0.430.87-0.44-50.6

Cumulative effect of accounting

change, net of taxes------0

Net income per common share -

diluted0.430.87 -0.44 -50.6

Shares used in calculation of net income

per common share - basic731.5749.8 -183 -2.4

Shares used in calculation of net income

per common share- diluted741.7770.1 -28.4 -3.7

Related Ratios:20162015

Current ratio 0.8 times0.8 times

Quick ratio0.3 times0.3 times

Receivable turnover 33.6 times33.7 times

Day's sales uncollected 10.9 days9.9 days

Inventory turnover 6.7 times6.0 times

Day's inventory on hand 54.5 days60.8 days

Payables turnover 13.0 times11.1 times

Day's payable 28.1 days32.9 days

Profit margin 3.0%7.1%

Asset turnover 1.9 times1.9 times

Return on assets 5.7%13.8%

Return on equity 13.2%29.8%

Debt to equity 1.3 times1.3 times

Interest coverage ratio 9.6 times28.8 times

Cash flow yield 4.0 times2.0 times

Cash flow to assets 22.9%27.2%

Free cash flow $274.2$250.9

Price Earnings ratio 35.5 times30.1 times

Required:

Evaluate the company's performance in terms of:

1. Liquidity

2. Profitability

3. Long-term Solvency

4. Adequacy of cash flows

5. Market Strength