Question
The following table gives abbreviated balance sheets and income statements for Starbucks (figures in $ millions). Balance SheetEnd of YearStart of YearAssetsCurrent assets:Cash and marketable
The following table gives abbreviated balance sheets and income statements for Starbucks (figures in $ millions).
Balance SheetEnd of YearStart of YearAssetsCurrent assets:Cash and marketable securities1,8443,234Accounts receivable948839Inventories1,0911,111Other current assets285288Total current assets4,1695,471Fixed assets:Net fixed assets3,5193,201Other long-term assets3,0642,845Total assets10,75211,517Liabilities and Shareholders' EquityCurrent liabilities:Accounts payable2,2441,940Other current liabilities7953,438Total current liabilities3,0395,378Long-term debt2,0481,299Other long-term liabilities394360Total liabilities5,4817,037Total shareholders' equity5,2724,480Total liabilities and shareholders' equity10,75211,517Income StatementNet sales16,448Cost of goods sold6,859Selling, general, and administrative expenses5,655Depreciation710Earnings before interest and taxes (EBIT)3,224Interest expense64Taxable income3,160Tax1,092Net income2,068Dividends783Addition to retained earnings1,285
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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started