Question
The following table gives abbreviated balance sheets and income statements for Starbucks. Balance Sheet End of Year Start of Year Assets Current assets: Cash and
The following table gives abbreviated balance sheets and income statements for Starbucks.
Balance Sheet | |||
End of Year | Start of Year | ||
Assets | |||
Current assets: | |||
Cash and marketable securities | 1,884 | 3,238 | |
Accounts receivable | 988 | 843 | |
Inventories | 1,095 | 1,115 | |
Other current assets | 289 | 292 | |
Total current assets | 4,256 | 5,488 | |
Fixed assets: | |||
Net fixed assets | 3,527 | 3,213 | |
Other long-term assets | 3,068 | 2,849 | |
Total assets | 10,851 | 11,550 | |
Liabilities and Shareholders' Equity | |||
Current liabilities: | |||
Accounts payable | 2,248 | 1,944 | |
Other current liabilities | 803 | 3,430 | |
Total current liabilities | 3,051 | 5,374 | |
Long-term debt | 2,052 | 1,303 | |
Other long-term liabilities | 398 | 364 | |
Total liabilities | 5,501 | 7,041 | |
Total shareholders' equity | 5,350 | 4,509 | |
Total liabilities and shareholders equity | 10,851 | 11,550 | |
Income Statement | |||
Net sales | 16,452 | ||
Cost of goods sold | 6,863 | ||
Selling, general, and administrative expenses | 5,659 | ||
Depreciation | 714 | ||
Earnings before interest and taxes (EBIT) | 3,216 | ||
Interest expense | 68 | ||
Taxable income | 3,148 | ||
Tax | 1,096 | ||
Net income | 2,052 | ||
Dividends | 787 | ||
Addition to retained earnings | 1,265 | ||
(figures in $ millions) |
Assume a tax rate of 35%. Calculate the following using balance-sheet figures from the start of the year:
a. Calculate the return on assets. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Return on assets %
b. Calculate the operating profit margin. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Operating profit margin %
c. Calculate the sales-to-assets ratio. (Round your answer to 2 decimal places.)
Sales-to-assets ratio
d. Calculate the inventory turnover. (Round your answer to 2 decimal places.)
Inventory turnover
e. Calculate the debt-equity ratio. (Round your answer to 2 decimal places.)
Debt-equity ratio
f. Calculate the current ratio. (Round your answer to 3 decimal places.)
Current ratio
g. Calculate the quick ratio. (Round your answer to 4 decimal places.)
Quick ratio
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