The dataset provides historical income statements and balance sheets for Starbucks, Inc. for fiscal years 2009 2019. Calculate Starbucks Free Cash Flow, ROIC, and g for each year from 2010 through 2019. Do the analysis first excluding Other Intangible Assets and Goodwill, and then redo the analysis including Other Intangible Assets and Goodwill. You will need to make the following assumptions:
Assumptions for Operating Working Capital:
i. Required cash is 10% of total net revenue
ii. Ignore short-term investments (they are excess cash)
iii. Ignore deferred tax assets
iv. Ignore the Accrued Litigation Charge
v. Ignore Income Taxes Payable as a Working Capital Liability
vi. Ignore the Current Portion of Long-term Debt (it is not an operating working capital amount it is just long-term debt).
Assumptions for NOPAT:
i. Ignore the Gain on Sale of Properties
ii. Ignore the Litigation Charge Expense
iii. Starbucks tax rate was 31% from 2009 to 2017 and then 21% afterward.
Assumptions for Invested Capital
i. Ignore Long-Term Investments
Interpret your results. What do you see? What explains this?
Starbucks Corporation - Income Statement Fiscal Year Ending 2013 2014 2009 2010 2011 2012 2015 2016 2017 2018 2019 All Figures in Millions Net Revenues: : Company-Operated Stores Licensed Stores Other (CPG, Foodservice, Channel Development) Total Net Revenues $8,180.1 795.0 799.5 9,774.6 $8,963.5 875.2 868.7 10,707.4 $9,632.4 1,007.5 1,060.5 11.700.4 $10,534.5 1,210.3 1,554.7 13,299.5 $11,793.2 1,360.5 1,738.5 14,892.2 $12,977.9 1,588,6 1,881.3 16,447.8 $15,197.3 1,861.9 2,103.5 19,162.7 $16,844.1 2,154.2 2,317.6 21,315.9 $17,650.7 2,355.0 2,381.1 22,386.8 $19,690.3 2,6522 2,377.0 24,719.5 $21,544.4 2,875.0 2,089.2 26,508.6 8,526.9 Cost of Sales Store Operating Expenses Other Operating Expenses Depreciation and Amortization General and Administrative Expenses Restructuring Charges Litigation Charge (Credit) Total Operating Expenses 4,324.9 3,425.1 264.4 534.7 453.0 332.4 4,458.6 3,551.4 293.2 510.4 569.5 53.0 4,915.5 3,594,9 392.8 523.3 749.3 5,813.3 3,918.1 429.9 550.3 801.2 6,382.3 4,286.1 457.2 621.4 937.9 6,858.8 4,638.2 457.3 709.6 991.3 7,787.5 5,411.1 522.4 893.9 1,196.7 8,511.1 6,064.3 545.4 980.8 1,360.6 7,065.8 8,486.4 518.0 1,011.4 1,408,4 153.5 7,930.7 9,472.2 554.9 1,247.0 1,708.2 224.4 10,493.6 371.0 1,377.3 1,824.1 135.8 2,784.1 15,469.0 (20.2) 13,635,0 9,334.5 9,436.1 10,175,8 11,512.8 15,811.6 17.462.2 18,643.5 21,137.4 22.728.7 Gain on Sale of Properties Income from Equity Investees Operating Income (Loss) 121.9 562.0 148.1 1,419.4 30.2 173.7 1,728.5 210.7 1,997,4 251.4 (325.4) 268.3 3,081.1 249.9 3,601.0 318.2 4,171.9 391.4 4,134,7 301.2 3,883.3 298.0 4,077.9 Extraordinary Items Interest Income and Other, Net Interest Expense Earnings/(Loss) Before Income Taxes 37.0 (39.1) 559.9 50.3 (32.7) 1,437.0 115.9 (33.3) 1.811.1 94.4 (32.7) 2,059.1 123.6 (28.1) (229.9) 142.7 (64.1) 3,159.7 329.5 43.0 (70.5) 3,903.0 108.0 (81.3) 4,198.6 275.3 (92.5) 4,317.5 1,875.6 191.4 (170.3) 5,780.0 622.8 96.5 (331.0) 4,466.2 Income Taxe Expense (Benefit) Net Earnings Including Noncontrolling Interests Net Earnings Attributable to Noncontrolling Interests Net Earnings Attributable to Starbucks 168.4 391.5 0.7 $390.8 488.7 948.3 2.7 $945.6 563.1 1,248.0 2.3 $1.245.7 674.4 1,384.7 0.9 $1,383.8 (238.7) 8.8 0.5 $8.3 1,092.0 2,067.7 (0.4) $2,068.1 $ 1,143.7 2,759.3 1.9 $2,757.4 1,379.7 2,818.9 1.2 $2.817.7 1,432,6 2,884.9 0.2 $2,884.7 1,262.0 4,518.0 (0.3) $4,518.3 871.6 3,594.6 (4.6) $3.599.2 $171.0 Cash Dividends Paid Repurchae of Common Stock $0.0 $0.0 $389,5 $513.0 $549.1 $628.9 $588.1 $783.1 $758.6 $928.6 $1,436.1 $1,178.0 $1,995.6 $1,450.4 $2,042.5 $1,743.4 $7,133.5 $1,761.3 $10,222.3 $285.6 $555.9 Starbucks Corporation - Balance Sheet As of Fiscal Year End 2009 2010 2011 2014 2016 2017 2018 $2,128.8 134,4 768.8 1,378.5 350.0 $2,462.3 228.6 870.4 1,364.0 358.1 $599.8 $1,164.0 $1,148.1 66.3 285.7 902.6 271.0 302.7 386.5 664.9 543.3 965.8 147.2 156.5 161.5 286.6 304.2 230.4 2,0358 2.756.4 3.794.9 71.2 191.8 107.0 352.3 341.5 372.3 2,536.4 2,416.5 2,355.0 $8,756.3 181.5 693.1 1,400.5 1,462.8 $2,686.6 70.5 879.2 1,529.4 488.2 $1,188.6 848.4 485.9 1,241.5 196.5 238.7 4.1996 116.0 459.9 2,658.9 97.3 144.7 143.7 399.1 $8,219.2 $2,575.7 658.1 561.4 1,111.2 287.7 277.3 5.471.4 58.3 496.5 3,200.5 967.0 185.3 274.8 862.9 $11,516.7 $1,708.4 135.4 631.0 1,090.9 285.6 317.4 4.168.7 318.4 514.9 3,519.0 903.3 198.9 273.5 856.2 $10.752.9 $1,530.1 81.3 719.0 1,306.4 334.2 381.7 4,352.7 312.5 352.0 4,088.3 828.9 415.9 520.4 1.575.4 $12,446.1 4.760.5 1,141.7 354.5 4,533.8 885.4 417.7 516.3 1,719.6 $14,329.5 5.283.4 542.3 481.6 4,919.5 795.4 362.8 441.4 1,539.2 $14,365.6 12,494.2 267.7 334.7 5,929.1 134.7 412.2 1,042.2 3,541.6 $24.156.4 5,653.9 220.0 396.0 6,431.7 1,765.8 479.6 781.8 3,490.8 $19.219.6 253.8 68.2 259.1 $5,576.8 346.5 70.8 262.4 $6,385.9 297.7 111.9 321.6 $7,360.4 ASSETS Al Figures in Millions Current Assets: Cash and Cash Equivalents Short-Term Investments Accounts Receivable, Net Inventories Prepaid Expenses and Other Deferred Income Taxes, Net Total Current Assets Long-Term Investments Equity and Cost Investments Property, plant and Equipment, Net Deferred Income Taxes, Net Other Assets Other Intangible Assets Goodwill TOTAL ASSETS LIABILITIES AND EQUITY Current Liabilities: Accounts Payable Accrued Litigation Charge Accrued Liabilities Insurance Reserves Income Taxes Payable Stored Value Card and Current Portion of Def. Refenue Current Portion of Long-Term Debt Total Current Liabilities Long-Term Debt Deferred Revenue Other Long-Term Liabilities Total Liabilities Shareholders' Equity: Common Stock, Par Value Additional Pald-in Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income Total Shareholders' Equity Noncontrolling Interests Total Equity TOTAL LIABILITIES AND EQUITY $267.1 $282.6 $540.0 $398.1 $533.7 $684.2 $730.6 $782.5 $1,179.3 $1,189.7 $491.7 2.784.1 1,269.3 178.5 770.9 154.3 936.2 146.2 940.9 145.6 1,133.8 167.7 1,514.4 196.1 1,760.7 224.8 1,999.1 246.0 1,934.5 215.2 2,207.8 210.5 1.291.7 1,269.0 388.7 414.1 449.3 510.2 653.7 794.5 983.8 1,171.2 1,288.5 2,195.6 213.7 102.8 1,642.9 349.9 5,684.2 9,090.2 6,775.7 1,430.5 22.980.6 1.581.0 549.3 1.779.1 549.4 2,075.8 549.5 2.209.8 549.6 5,3773 1,299.4 3,038.7 2,048.3 3,653.5 2,347.5 4.146.9 3,602.2 4.220.7 3,932.6 6.168.7 11,167.0 6,744.4 1,370.5 25.450.6 389.6 2.519.9 375.1 2.703.6 347.8 2.973.1 345.3 3,104.7 357.7 7,034.4 392.2 5,479.2 625.3 6,626.3 689.7 8,438.8 755.3 8.908.6 1.2 41.1 0.7 186.4 2.793.2 65.4 3,045.7 11.2 3,056.9 $5,576.8 0.7 145.6 3,471.2 57.2 3,674.7 7.6 3,682.3 $6.385.9 0.7 40.5 4.297.4 46.3 4,384.9 2.4 4,387.3 $7.360.4 0.7 39.4 5,046.2 22.7 5.109.0 5.5 5.114.5 $8.219.2 0.8 282.1 4,130.3 67.0 4.480.2 2.1 4,482.3 $11.516.7 0.7 39.4 5,206.6 25.3 5.272.0 1.7 5.273.7 $10.752.9 1.5 41.1 5,974.8 (1994) 5.818.0 1.8 58198 $12.446.1 1.5 41.1 5,949.8 (108.4) 5,884.0 6.7 5.890.7 $14,329.5 1.4 41.1 5,563.2 (155.6) 5.450.1 6.9 5,457.0 $14.365.6 1.3 41.1 1,457.4 (330.3) 1.169.5 6.3 1.175.8 $24,156.4 (5,771.2) (503.3) (6.232.2) 1.2 (6.231.01 $19.219.6 Starbucks Corporation - Income Statement Fiscal Year Ending 2013 2014 2009 2010 2011 2012 2015 2016 2017 2018 2019 All Figures in Millions Net Revenues: : Company-Operated Stores Licensed Stores Other (CPG, Foodservice, Channel Development) Total Net Revenues $8,180.1 795.0 799.5 9,774.6 $8,963.5 875.2 868.7 10,707.4 $9,632.4 1,007.5 1,060.5 11.700.4 $10,534.5 1,210.3 1,554.7 13,299.5 $11,793.2 1,360.5 1,738.5 14,892.2 $12,977.9 1,588,6 1,881.3 16,447.8 $15,197.3 1,861.9 2,103.5 19,162.7 $16,844.1 2,154.2 2,317.6 21,315.9 $17,650.7 2,355.0 2,381.1 22,386.8 $19,690.3 2,6522 2,377.0 24,719.5 $21,544.4 2,875.0 2,089.2 26,508.6 8,526.9 Cost of Sales Store Operating Expenses Other Operating Expenses Depreciation and Amortization General and Administrative Expenses Restructuring Charges Litigation Charge (Credit) Total Operating Expenses 4,324.9 3,425.1 264.4 534.7 453.0 332.4 4,458.6 3,551.4 293.2 510.4 569.5 53.0 4,915.5 3,594,9 392.8 523.3 749.3 5,813.3 3,918.1 429.9 550.3 801.2 6,382.3 4,286.1 457.2 621.4 937.9 6,858.8 4,638.2 457.3 709.6 991.3 7,787.5 5,411.1 522.4 893.9 1,196.7 8,511.1 6,064.3 545.4 980.8 1,360.6 7,065.8 8,486.4 518.0 1,011.4 1,408,4 153.5 7,930.7 9,472.2 554.9 1,247.0 1,708.2 224.4 10,493.6 371.0 1,377.3 1,824.1 135.8 2,784.1 15,469.0 (20.2) 13,635,0 9,334.5 9,436.1 10,175,8 11,512.8 15,811.6 17.462.2 18,643.5 21,137.4 22.728.7 Gain on Sale of Properties Income from Equity Investees Operating Income (Loss) 121.9 562.0 148.1 1,419.4 30.2 173.7 1,728.5 210.7 1,997,4 251.4 (325.4) 268.3 3,081.1 249.9 3,601.0 318.2 4,171.9 391.4 4,134,7 301.2 3,883.3 298.0 4,077.9 Extraordinary Items Interest Income and Other, Net Interest Expense Earnings/(Loss) Before Income Taxes 37.0 (39.1) 559.9 50.3 (32.7) 1,437.0 115.9 (33.3) 1.811.1 94.4 (32.7) 2,059.1 123.6 (28.1) (229.9) 142.7 (64.1) 3,159.7 329.5 43.0 (70.5) 3,903.0 108.0 (81.3) 4,198.6 275.3 (92.5) 4,317.5 1,875.6 191.4 (170.3) 5,780.0 622.8 96.5 (331.0) 4,466.2 Income Taxe Expense (Benefit) Net Earnings Including Noncontrolling Interests Net Earnings Attributable to Noncontrolling Interests Net Earnings Attributable to Starbucks 168.4 391.5 0.7 $390.8 488.7 948.3 2.7 $945.6 563.1 1,248.0 2.3 $1.245.7 674.4 1,384.7 0.9 $1,383.8 (238.7) 8.8 0.5 $8.3 1,092.0 2,067.7 (0.4) $2,068.1 $ 1,143.7 2,759.3 1.9 $2,757.4 1,379.7 2,818.9 1.2 $2.817.7 1,432,6 2,884.9 0.2 $2,884.7 1,262.0 4,518.0 (0.3) $4,518.3 871.6 3,594.6 (4.6) $3.599.2 $171.0 Cash Dividends Paid Repurchae of Common Stock $0.0 $0.0 $389,5 $513.0 $549.1 $628.9 $588.1 $783.1 $758.6 $928.6 $1,436.1 $1,178.0 $1,995.6 $1,450.4 $2,042.5 $1,743.4 $7,133.5 $1,761.3 $10,222.3 $285.6 $555.9 Starbucks Corporation - Balance Sheet As of Fiscal Year End 2009 2010 2011 2014 2016 2017 2018 $2,128.8 134,4 768.8 1,378.5 350.0 $2,462.3 228.6 870.4 1,364.0 358.1 $599.8 $1,164.0 $1,148.1 66.3 285.7 902.6 271.0 302.7 386.5 664.9 543.3 965.8 147.2 156.5 161.5 286.6 304.2 230.4 2,0358 2.756.4 3.794.9 71.2 191.8 107.0 352.3 341.5 372.3 2,536.4 2,416.5 2,355.0 $8,756.3 181.5 693.1 1,400.5 1,462.8 $2,686.6 70.5 879.2 1,529.4 488.2 $1,188.6 848.4 485.9 1,241.5 196.5 238.7 4.1996 116.0 459.9 2,658.9 97.3 144.7 143.7 399.1 $8,219.2 $2,575.7 658.1 561.4 1,111.2 287.7 277.3 5.471.4 58.3 496.5 3,200.5 967.0 185.3 274.8 862.9 $11,516.7 $1,708.4 135.4 631.0 1,090.9 285.6 317.4 4.168.7 318.4 514.9 3,519.0 903.3 198.9 273.5 856.2 $10.752.9 $1,530.1 81.3 719.0 1,306.4 334.2 381.7 4,352.7 312.5 352.0 4,088.3 828.9 415.9 520.4 1.575.4 $12,446.1 4.760.5 1,141.7 354.5 4,533.8 885.4 417.7 516.3 1,719.6 $14,329.5 5.283.4 542.3 481.6 4,919.5 795.4 362.8 441.4 1,539.2 $14,365.6 12,494.2 267.7 334.7 5,929.1 134.7 412.2 1,042.2 3,541.6 $24.156.4 5,653.9 220.0 396.0 6,431.7 1,765.8 479.6 781.8 3,490.8 $19.219.6 253.8 68.2 259.1 $5,576.8 346.5 70.8 262.4 $6,385.9 297.7 111.9 321.6 $7,360.4 ASSETS Al Figures in Millions Current Assets: Cash and Cash Equivalents Short-Term Investments Accounts Receivable, Net Inventories Prepaid Expenses and Other Deferred Income Taxes, Net Total Current Assets Long-Term Investments Equity and Cost Investments Property, plant and Equipment, Net Deferred Income Taxes, Net Other Assets Other Intangible Assets Goodwill TOTAL ASSETS LIABILITIES AND EQUITY Current Liabilities: Accounts Payable Accrued Litigation Charge Accrued Liabilities Insurance Reserves Income Taxes Payable Stored Value Card and Current Portion of Def. Refenue Current Portion of Long-Term Debt Total Current Liabilities Long-Term Debt Deferred Revenue Other Long-Term Liabilities Total Liabilities Shareholders' Equity: Common Stock, Par Value Additional Pald-in Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income Total Shareholders' Equity Noncontrolling Interests Total Equity TOTAL LIABILITIES AND EQUITY $267.1 $282.6 $540.0 $398.1 $533.7 $684.2 $730.6 $782.5 $1,179.3 $1,189.7 $491.7 2.784.1 1,269.3 178.5 770.9 154.3 936.2 146.2 940.9 145.6 1,133.8 167.7 1,514.4 196.1 1,760.7 224.8 1,999.1 246.0 1,934.5 215.2 2,207.8 210.5 1.291.7 1,269.0 388.7 414.1 449.3 510.2 653.7 794.5 983.8 1,171.2 1,288.5 2,195.6 213.7 102.8 1,642.9 349.9 5,684.2 9,090.2 6,775.7 1,430.5 22.980.6 1.581.0 549.3 1.779.1 549.4 2,075.8 549.5 2.209.8 549.6 5,3773 1,299.4 3,038.7 2,048.3 3,653.5 2,347.5 4.146.9 3,602.2 4.220.7 3,932.6 6.168.7 11,167.0 6,744.4 1,370.5 25.450.6 389.6 2.519.9 375.1 2.703.6 347.8 2.973.1 345.3 3,104.7 357.7 7,034.4 392.2 5,479.2 625.3 6,626.3 689.7 8,438.8 755.3 8.908.6 1.2 41.1 0.7 186.4 2.793.2 65.4 3,045.7 11.2 3,056.9 $5,576.8 0.7 145.6 3,471.2 57.2 3,674.7 7.6 3,682.3 $6.385.9 0.7 40.5 4.297.4 46.3 4,384.9 2.4 4,387.3 $7.360.4 0.7 39.4 5,046.2 22.7 5.109.0 5.5 5.114.5 $8.219.2 0.8 282.1 4,130.3 67.0 4.480.2 2.1 4,482.3 $11.516.7 0.7 39.4 5,206.6 25.3 5.272.0 1.7 5.273.7 $10.752.9 1.5 41.1 5,974.8 (1994) 5.818.0 1.8 58198 $12.446.1 1.5 41.1 5,949.8 (108.4) 5,884.0 6.7 5.890.7 $14,329.5 1.4 41.1 5,563.2 (155.6) 5.450.1 6.9 5,457.0 $14.365.6 1.3 41.1 1,457.4 (330.3) 1.169.5 6.3 1.175.8 $24,156.4 (5,771.2) (503.3) (6.232.2) 1.2 (6.231.01 $19.219.6
