Starbucks' Report of Independent Registered Public Accounting Firm 1. What is the name of Starbucks' independent audit firm? 2. What type of opinion did the independent auditors issue on Starbucks' financial statements (unqualified, qualified, adverse or disclaimer)? What does this opinion mean? 3. What does this audit opinion mean? Income Statement 4. In the [Inc St-Vert] sheet, complete preparing a "common-size" income statement (vertical analysis) for all three fiscal years. In common-size income statements, net sales revenue is 100 percent and every other number is a percentage of sales. Link to the sheet to complete the income statement vertical analysis an> Inc St-Vert'188 Calculate the following values: Note: Starbucks does not present "Gross Margin" as a line item on its Income Statements, so you'll need to calculate this by subtracting "Product and distribution costs" from "Total net revenues." To calculate the Net margin percentage, use "Net earnings attributable to Starbucks." Fiscal 2020 Starbucks Corporation Fiscal 2019 (ended Sep. 27, 2020) (ended Sep. 29, 2019) 5. Gross margin percentage B 6. Net margin percentage 7. During which of these two years did Starbucks have better profitability performance? Come Statement - Horizontal Analysis 8. In the [Inc St-Horiz] sheet, complete computing annual changes for each line item on the income statement. Link to the sheet to complete the income Statement horizontal analysis >> Inc St-Horiz'ID8 9. Enter an "X" in the box next to the option below that best describes the trend in Starbucks' revenues during the reported periods. Select only one of the choices. Steady or accelerating increase Steady or accelerating decrease Fluctuating, with an initial increase followed by a decrease Fluctuating, with an initial decrease followed by an increase Unchanged 0. Enter an "X" in the box next to the option below that best describes the trend in Starbucks' selling, general & administrative expenses (operating expenses) during the reported periods. Select only one of the choices. Steady or accelerating increase Steady or accelerating decrease Fluctuating, with an initial increase followed by a decrease Fluctuating, with an initial decrease followed by an increase Ilinchanged 11. Enter an "X" in the box next to the option below that best describes the trend in Starbucks' net income during the reported periods. Select only one of the choices. Steady or accelerating increase Steady or accelerating decrease Fluctuating, with an initial increase followed by a decrease Fluctuating, with an initial decrease followed by an increase Unchanged 12. Examine the percentage changes in income statement line items from 2019 to 2020 for Starbucks. Summarize what is causing the changes in net income from fiscal year 2019 to 2020. 13. Do you expect the trend to continue? Why or why not? alance Sheet - Vertical (Common Size) Analysis 14. In the (Bal Sht-Vert) sheet, complete preparing common-size balance sheets for the years ended Sep. 27, 2020 and Sep. 29, 2019. In a common-size balance sheet, total assets is 100 percent and every other number is a percentage of total assets. Link to the sheet to complete the Balance Sheet vertical analysis ==> Bal Sht-Vert'!C10 Answer the following questions: Fiscal 2019 (ended Sep. 29, 2019) Answer the following questions: Fiscal 2020 Starbucks Corporation (ended Sep. 27, 2020) 15. What percent of total assets are current assets? 16. Which current asset has the largest balance? 17. What percent of total assets are long-term assets? 18. Which long-term asset has the largest balance? 19. What percent of total assets are current liabilities? 20. Which current liability has the largest balance? 21. What percent of total assets are long-term liabilities? 22. Which long-term liability has the largest balance? 23. What percent of Total Assets is Total Stockholders' Equity? 24. Does Starbucks finance its assets mostly with debt or equity? Balance Sheet - Horizontal Analysis 25. In the [Bal Sht-Horiz] sheet, complete computing annual changes for each line item on the balance sheet. Link to the sheet to complete the Balance Sheet horizontal analysis => Bal Sht-Horiz'1A1 Calculate the following values: From Fiscal 2019 Starbucks Corporation to Fiscal 2020 26. What was the dollar-amount of change in Inventory? 27. What was the percentage change in Inventory? 28. What was the direction of the change (increase or decrease) 29. Which asset line item had the largest dollar increase? 30. Which asset line item had the largest percentage change? 31. Which liability line item had largest dollar increase? 32. Which liability line item had the largest percentage change? 33. What was the total dollar amount of the change in stockholders' equity? 34. What was the direction of the change (increase or decrease) 35. Was this change in equity more from earnings, issuing stock, or something else? Statement of Cash Flows and Statement of Equity Answer the following questions: Starbucks Corporation Fiscal 2020 (ended Sep. 27, 2020) Fiscal 2019 (ended Sep. 29, 2019) 36. What is the total amount of change in the cash balance during the year? 37. What was the direction of the change (increase or decrease) 38. Largest individual Investing cash inflow line item description 39. Largest individual Investing cash outflow line item description 40. Largest individual Financing cash inflow line item description 11 0 38. Largest individual Investing cash inflow line item description 39. Largest individual Investing cash outflow line item description 40. Largest individual Financing cash inflow line item description 41. Largest individual Financing cash outflow line item description 42. Amount of dividends declared during the year 43. on which financial statement did you find this? 44. Amount of dividends paid during the year 45. On which financial statement did you find this? 46. Briefly explain why the dividends declared amount may not be the same as dividends paid. 81% 10% 9% 100% 33% 2020 19.164.6 2,327.1 2.026.3 23518.0 7.694.9 10.764.0 430.3 1.431.3 1.679.6 278.7 22.278.8 3225 1,561.7 46% 2% 6% 7% 1% 95% 1% 2019 $ 21,544.4 881% 2.875.0 11% 2,0892 8% 26.508.6 100% 8,5269 32% 10.493.6 40% 371.0 1% 1,377.3 5% 1.824.1 7% 135.8 1% 22.728.7 86% 298.0 1% 4,077.9 15% 06 6228 2% 96.5 0% (331.0) (1%) 2018 $ 19,690.3 79.7% 2.652.2| 10.7% 2.377.0 9.6% 24,719.5 100.0% 7.930.7 | 32.1% 9.472.2138.3% 554.9 2.2% 1,247.0 5.0% 1,708.2 6.9% 224.4 0.9% 21.137.41 85.5% 301.2 1.2% 3883.3 15.7% 1376.4 5.6% 4992 2.0% 191.4 0.8% (170.3)] (0.7%) 7% 0% 39.7 (437.0) 0% 0% (2%) A la Vertical Analysis 95% 2020 22,278.8 322.5 1,561.7 1% 7% 0% 0% 39.7 0% (437.0) (2%) 1,164.4 5% 239.7 1% 924.7 4% (3.6) (0%) 928.3 4% 2019 22,728.7 86% 298.0 1% 4,077.9 15% 0% 622.8 2% 96.5 0% (331.0) (1%) 4,466.2 17% 871.6 3% 3,594.6 14% (4.6) (0%) 3,599.2 14% 2018 21,137.4 85.5% 301.2 1.2% 3,883.3 15.7% 1,376.4 5.6% 499.2 2.0% 191.4 0.8% (170.3) (0.7%) 5,780.0 23.4% 1,262.0 5.1% 4,518.0 18.3% (0.3) (0.0%) $ 4,518.3 18.3% $ $ $ $ 0.79 0.79 2.95 2.92 $ $ 3.27 3.24 $ $ 1,172.8 1,181.8 1.221.2 1.233.2 1,382.7 1.394.6 2018 S che % Che 2019 %Chg 2020 $ Che CONSOLIDATED STATEMENTS OF EARNINGS fin millions, except per share data) Net revenues Company-operated stores Licensed stores Other Total net revenues Product and distribution costs Store operating expenses Other operating expenses Depreciation and amortization expenses General and administrative expenses Restructuring and impairments Total operating expenses Income from equity investees Operating income Gain resulting from acquisition of joint venture Het gan resulting from divestiture of certain operations Interest income and other net Interest expense Earrings before income taxes income tax expense $ 19,1646 2,3271 20263 23,518,0 7,8949 10,764 0 4303 1.4313 1.6796 278.7 22,2788 3225 1,5017 ($2,380) (1196) ($548) (1996) (5631 (396) (S2.991) (11%) (5832) (10%) $270 396 S59 16% $54 496 (S145) (89) $143 105 (5450) 123) $25 8% (S2.516) (62%) $ 21,5444 28750 2,089.2 26,508,6 8,526.9 10.4936 3710 1,3773 1 8241 135.8 22.7287 2980 4,0779 $1,854.1 996 $223 8% (5288) (1296) $1,789 7% $596 896 $1,021 11% ($184 (3396) $130 10% $116 7% (889) (39%) 51,591 8% (Sa) (190 $195 5% (1,376 4) $124 25% 1595509 15161) 94 ($1314) (28% 53901311 $ 19,690 3 2,6522 2,377.0 24,719,5 7,930.7 9,4722 5549 1,2470 1,708 2 224.4 21,1374 301 2 3,8833 1,3784 4992 1914 (1703) 5,780.0 1,2820 10 39.7 (4370) 1,1044 2397 (622.8) (100%) (557) 159%) 1$ 106) 32% (99,302) (74%) 15632117286) 6229 965 (3310) 4.4062 8716 278.7 22,278 8 322.5 1,5617 $143 105% ($450) (296) $25 896 152,516) (62%) 1358 22,7287 2980 4,0779 Restructuring and impairments Total operating expenses Income from equity investees Operating income Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain operations Interest income and other, net Interest expense Earnings before income taxes Income tax expense Net earnings including noncontrolling interests Netloss attributable to noncontrolling interests Net earnings attributable to Starbucks Earnings per share-basic Ewings per share-diluted Weighted average shares outstanding Basic Diluted 39.7 (4370) 1.1644 239.7 9247 (3.6) 9283 (622.8) (100%) (557) (59 (5106) 32% ($3,302) (741 $632) (229) 152,670) 174%) 51 12296 $(2.670.9) 1746) 6228 965 (3310) 4,416.2 8716 3,5946 (46) 3,5992 2.95 292 (989) (3996) $1,591 89 (53) (136) $195 5% (1,3764) 10 S124 25% ($95 (5096) IS161) 94% IS1,314) 123%) ($390) (1961 19923) (20%) (S4) 1433% (5919) (2016) 2244 21,1374 3012 3.8833 1,3764 4992 191.4 (1703) 5,7800 1,2620 4.5180 (0.3) $4,5183 $ $ $ $ 0.79 0.79 S $ $ $ 327 3.24 1,1728 1 1818 1.2212 1,233 2 1,3827 1.3946 Vertical Analysis Sep 29 2019 293 $ 2,686.6 14% 105 0% 8792 5% 1529.4 4882 34 5,653.9 220.0 1% 396.0 2% 6,4317 33% 0.0 09 1,765.8 92 479.6 24 7818 3,430.8 18% $ 19219.6 100% STARBUCKS CORPORATION 10-K Sep. 27, 2020 Consolidated Balance Sheets fillons, execar por share ots) Sep 27. 2020 Current ascets Cach and coch equivalente $ 4,350.9 15% Short-term investments 2812 Accounts receivable, het 883.4 3% Inventorice 15514 5% Prepaid expenses and other current secto 739.5 3% Total current soseto 7,806.4 27% Long-term investments 206.1 Equity investments 478.7 2% Property, plant and equipment, net 6,2414 21% Operating lesse, right-of-use asset 8,134.1 28% Deferred income taxes, not 1.789.9 6% Other long-term ascets 568.6 2% Other intangible assets 552.1 2% Goodwill 3.5972 12% TOTAL ASSETS 329374.5 100% LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 997.9 34 Accrued liabilities 1.160.7 4% Accrued payroll and benefits 636.0 2% Income taxes payable 38.2 02 Current portion of operating leace liability 1,248.8 4% Stored value card liability and current portion of deferred revenue 1,4565 5% Short-term debt 438.8 12 Current portion of long-term debt 1,249.9 4% Total current liabilities 7.346.8 25% Long-term debt 14,659.6 50% Operating lease liability 7,661.7 26% Deferred revenue 6,598.5 224 Other long-term liabilities 907.3 34 Total liabilities 37.173.9 127% Shareholders' deficit: 0 Common stock ($0,001 par value) - authorised, 2.400.0 choreo: issued and outstanding, 1.173.3 and 1,184,6 chares, respectively 1.2 04 Additional poid-in capital 373.9 15 Retained deficit (7.815.6) (272) Accumulated other comprehensive loss (364.61 (13) Total choreholdero' deficit 61.805.1) (273) Noncontrolling interests 5.7 0% Total deficit 17,198.4 1273 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) 1293745 100% 0 0 62 $ 1,189.7 1,753.7 664.6 1,291.7 0.0 1,263.0 0.0 0.0 6,168.7 11,167.0 0.0 6,744.4 1370.5 25,450.6 3. 7% 04 3% 0% 0% 32% 58% 0 35% 7% 132% 0 12 41.1 04 (5.7112) (30%) 1503.31 (33) (6.232.2) (32) 12 04 16,231.0.32391 $19.213.6 100% STARBUCKS CORPORATION 10- Sep. 27, 2020 Horizontal Analysis Sep 29. 2019 $ 2,686.6 70.5 $79.2 1,529.4 5.653.2 220.0 396.6 6,417 0.0 1,765. 479.6 781.6 3,490.8 $ 19,219.6 $ 1,189.7 1,753.7 5 Consolidated Balance Sheets millions, except footnotes) Sep 27. 2020 Cha Cha Carh and careialonu $ 11 4,350. $1,664 62% $211 2012 299% Short-terminvartment Account receivable et 883.4 $4 04 14 1,551.4 14 Interi $22 Propodother currenture 7345 $251 51% 15 Tet al current are 7,806.4 $2,153 38% IT Longtermimatment 206.1 (514) 476,7 Equity invartment $83 21% Property, plantandeguipment, et 6,241.4 (190) 39) 201 Operatinglesta we wret 3.134.1 $8,134 21 Deferred income taxe, et 1,789.9 $28 194 22 Other lengtermuret 5686 $89 13% 23 Otherintangible wrotu 5$2.1 (12301 (2930 24 Gaduill 3.597.2 $106 3% 25 TOTAL ASSETS $29.3745 310, 155 53% LIABILITIES AND SHAREHOLDERS' EQUITTI(DEFICIT) 23 Current Gabiti Account payable $ 497.9 ($132) (16%) Accredibilities 1,160.7 ($593) (343) 31 Aerupayrolland 64.0 $31 5% 32 Income taxe payable 982 ($1.194) (82%) 33 Current portion of operating to reliability 1,243.8 34 Steredwalve card liablety and current partion of deferred 1.456.5 $188 15% 35. Shart-term dobt 36 Gurra portion of lenorm dobt 1249.9 37 Total currentlisbiliter 7,346. $1,178 19% 34 Lontar det 14,6596 $3,493 312 39 Operating lewe liability 7,661.7 40 Deferred 6,598.5 (3146) Otherlantarmobilita 907-2 18452 (343 42 Tata Sabatier 37.172.9 $11,723 46% 47 Shareholder deficit Cammanstock ($0.001 a value)-autharira d. 2,400.0 haren unvedondatrendin. 1,179.341,184.6sharer, 44 Perpectively 12 $0 0% 45 Additional paid in capital 373 $333 810% 46 Retained defien (7,8153 1010 47 Accumulate other comprobarivela 364.5) $139 40 Totalarealder deficit (28% 67,805.13 ($1.573) 25% 49 Hos centraliingiatorer 5.22 35 375% 50 Total defick 799,00 31568 25% 51 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/COEFICITUS29.3745 $10.155 53% 1,241.7 0.0 1,269.0 0.0 DO 6.168.7 11,167.0 0.6 6,744.4 1,370.5 25.450.6 1.2 355 41.1 (5.771.2) (5032) (4.232.2) 1.2 16,231.03 $122196 Sep 27. 2020 Sep 23. Sep 30. 2018 2019 $ 324.70 $ 3,594,60 % 4,518.00 1,503.20 (25.80) (280.70) 227.70 1,449.30 (1.495.40) (250.60) 216.80 1,305.90 714.90 (242.80) 226.80 (1,376.40) (499.20) 250.30 37.60 248.60 (622.80) 308.00 10.50 1.197.60 454.40 24.50 142.60 45.30 75.60 13.40 (2.70) (10.30) (317.50) (1,214.60) (210.80) (1,231.40) 280.50 1597.80 (197.70) (173.00) 922.00 1,237.10 31.90 (30.50) 131.00 (41.20) (839.50) 146.00 3.91.60 7,109.40 First End OPERATING ACTIVITIES: Net earnings including noncontrolling interests Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Deferred income taxes, net Income earned from equity method investees Distributions received from cquity method investees Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain retail operatione Stock-based compensation Goodwill impairments Non-cach lease cost Loss on retirement and impairment of rets Other Cash provided by/(used in) changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses and other current assets Income taxes payable Accounts payable Deferred revenue Operating lease liability Other operating assets and liabilities Net cash provided by operating activities INVESTING ACTIVITIES: Purchases of investments Sales of investments Maturities and calls of investments Acquisitions, net of cash acquired Addition to property, plant and equipment Net proceeds from the divestiture of certain operations Other Net cach used in investing activities FINANCING ACTIVITIES: Proceeds from issuance of short-term debt Repayments of short-term debt Proceeds from issuance of long-term debt Repayments of long-term debt Proceeds from souance of common stock Cash dividends paid Repurchase of common stock Minimum tox withholdings on share-based awards Other Net cash provided by used in) financing activities Effect of exchange rate changes on cachond cash equivalente Net increase(decrease in cash and coch equivalente CASH AND CASH EQUIVALENTS: Balnina narind 31.00 (141.10 5,047.00 16.40 11.937.80 (443.30) 186.70 73.70 (190.40) 298.30 59.80 (1,483.60) (131.30) 459.00 45.30 (1,311.30) (1,976.40) 608.20 5.60 (2 361.50) (1,806.60) 684.30 (56.20 1010.80) 144.40 (1.711.50 1,406.60 (367.70) 4,727.60 5,584.10 298.80 (1,923.50) (1,698.30) (91.30) (37.701 1713.30 64.10 1664.30 1.936.00 (350.00) 403.80 (1,761.30) (10,222.30) (111.60) (17.500 (10,056.90) 149.00 (6.063.70) 153.30 (1743.40) (7.133.50) (62.70) (41.20 (3,242.80) 39.50 6,294.00 2696 6 8763 2460 4 50 51 52 52 (1,688.30) (31.90) 137.00 1,713.30 64.70 1,664.30 (10,222.30) (11160) (1750 (10.056.90) (49.00) 16,063.70) (7.138.50) [62,701 141.20) (3,242,80) 39.500 6,234.00 55 56 ST Repurchase of common stock Minimum tax withholdings on chare-based worde Other Het cock provided by wood is financing octivities Effect of exchange rate changes on cachond cash equivalents Net in cel(decrease in cash and cash equivalente CASH AND CASH EQUIVALENTS: Beginning of period End of period SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for Interest, not of capitalised interest inconet 2.686.60 $350.30 8.75630 2,686 60 2.462.30 8.756.30 58 55 40 $ $ 336.30 $ 1,639.10 $ 233.50 470.10 $ $ 131.10 1,176.90 a 4 5 7 8 9 10 11 12 13 14 5 18 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 29 Balance, October 1, 2017 Net earnings/(loss) Other comprehensive income/(loss) Stock-based compensation expense Exercise of stock options/vesting of RSUS Sale of common stock Repurchase of common stock Cash dividends declared, 1.32 per share Net distributions to noncontrolling interests Balance, September 30, 2018 Cumulative effect of adoption of new accounting guidance Net earnings/(loss) Other comprehensive income/(loss) Stock-based compensation expense Exercise of stock options/vesting of RSUS Sale of common stock Repurchase of common stock Cash dividends declared, $1.49 per share Net distributions to noncontrolling interests Balance, September 29, 2019 Cumulative effect of adoption of new accounting guidance Net earnings/loss) Other comprehensive income/loss) Stock-based compensation expense Exercise of stock optionsvesting of RSUS Sale of common stock Repurchase of common stock Cash dividends declared, $123 per share Noncontrolling interest resulting from divestiture Balance, September 27, 2020 Accumulated Other Comprehensive Shareholders' Noncontrolling Income!(Loss) Equity (Deficit) Interests (15560) 5 5,450.10 $ 6.90 $ 4,518.30 (0.30) (17470) (174.70) 253.80 59.40 31.80 (7.208.70) (1,760.50) (0.30) $ (330 30$ 1.169.50 $ 6.30 $ 495.60 3,599 20 (4.60) (173.00) (173.00 311.30 264.90 33.40 (10,131.50) (1,801.60) (0.50) $ (503.30) S 16.232.20 $ 1.20 S 4.80 17.30 928.30 (3.60) 133.90 133.90 252.10 169.90 37.20 (1,675.00) (1.43660) (0.20) 8.30 $ (364.60) S 7.805.10) S 5.70 S Total 5,457.00 4,518.00 (174.70) 253.80 59.40 31.80 (7.208.70) (1,760.50) (0.30) 1.175.80 495.60 3,594.60 (173.00) 311.30 264.90 33.40 (10,131.50) (1,801.60) (0.50) (6.231.00) 17.30 924.70 133.90 252.10 169.90 37.20 (1.675.00) (1.436.80) 8.30 (7 799.40) Starbucks' Report of Independent Registered Public Accounting Firm 1. What is the name of Starbucks' independent audit firm? 2. What type of opinion did the independent auditors issue on Starbucks' financial statements (unqualified, qualified, adverse or disclaimer)? What does this opinion mean? 3. What does this audit opinion mean? Income Statement 4. In the [Inc St-Vert] sheet, complete preparing a "common-size" income statement (vertical analysis) for all three fiscal years. In common-size income statements, net sales revenue is 100 percent and every other number is a percentage of sales. Link to the sheet to complete the income statement vertical analysis an> Inc St-Vert'188 Calculate the following values: Note: Starbucks does not present "Gross Margin" as a line item on its Income Statements, so you'll need to calculate this by subtracting "Product and distribution costs" from "Total net revenues." To calculate the Net margin percentage, use "Net earnings attributable to Starbucks." Fiscal 2020 Starbucks Corporation Fiscal 2019 (ended Sep. 27, 2020) (ended Sep. 29, 2019) 5. Gross margin percentage B 6. Net margin percentage 7. During which of these two years did Starbucks have better profitability performance? Come Statement - Horizontal Analysis 8. In the [Inc St-Horiz] sheet, complete computing annual changes for each line item on the income statement. Link to the sheet to complete the income Statement horizontal analysis >> Inc St-Horiz'ID8 9. Enter an "X" in the box next to the option below that best describes the trend in Starbucks' revenues during the reported periods. Select only one of the choices. Steady or accelerating increase Steady or accelerating decrease Fluctuating, with an initial increase followed by a decrease Fluctuating, with an initial decrease followed by an increase Unchanged 0. Enter an "X" in the box next to the option below that best describes the trend in Starbucks' selling, general & administrative expenses (operating expenses) during the reported periods. Select only one of the choices. Steady or accelerating increase Steady or accelerating decrease Fluctuating, with an initial increase followed by a decrease Fluctuating, with an initial decrease followed by an increase Ilinchanged 11. Enter an "X" in the box next to the option below that best describes the trend in Starbucks' net income during the reported periods. Select only one of the choices. Steady or accelerating increase Steady or accelerating decrease Fluctuating, with an initial increase followed by a decrease Fluctuating, with an initial decrease followed by an increase Unchanged 12. Examine the percentage changes in income statement line items from 2019 to 2020 for Starbucks. Summarize what is causing the changes in net income from fiscal year 2019 to 2020. 13. Do you expect the trend to continue? Why or why not? alance Sheet - Vertical (Common Size) Analysis 14. In the (Bal Sht-Vert) sheet, complete preparing common-size balance sheets for the years ended Sep. 27, 2020 and Sep. 29, 2019. In a common-size balance sheet, total assets is 100 percent and every other number is a percentage of total assets. Link to the sheet to complete the Balance Sheet vertical analysis ==> Bal Sht-Vert'!C10 Answer the following questions: Fiscal 2019 (ended Sep. 29, 2019) Answer the following questions: Fiscal 2020 Starbucks Corporation (ended Sep. 27, 2020) 15. What percent of total assets are current assets? 16. Which current asset has the largest balance? 17. What percent of total assets are long-term assets? 18. Which long-term asset has the largest balance? 19. What percent of total assets are current liabilities? 20. Which current liability has the largest balance? 21. What percent of total assets are long-term liabilities? 22. Which long-term liability has the largest balance? 23. What percent of Total Assets is Total Stockholders' Equity? 24. Does Starbucks finance its assets mostly with debt or equity? Balance Sheet - Horizontal Analysis 25. In the [Bal Sht-Horiz] sheet, complete computing annual changes for each line item on the balance sheet. Link to the sheet to complete the Balance Sheet horizontal analysis => Bal Sht-Horiz'1A1 Calculate the following values: From Fiscal 2019 Starbucks Corporation to Fiscal 2020 26. What was the dollar-amount of change in Inventory? 27. What was the percentage change in Inventory? 28. What was the direction of the change (increase or decrease) 29. Which asset line item had the largest dollar increase? 30. Which asset line item had the largest percentage change? 31. Which liability line item had largest dollar increase? 32. Which liability line item had the largest percentage change? 33. What was the total dollar amount of the change in stockholders' equity? 34. What was the direction of the change (increase or decrease) 35. Was this change in equity more from earnings, issuing stock, or something else? Statement of Cash Flows and Statement of Equity Answer the following questions: Starbucks Corporation Fiscal 2020 (ended Sep. 27, 2020) Fiscal 2019 (ended Sep. 29, 2019) 36. What is the total amount of change in the cash balance during the year? 37. What was the direction of the change (increase or decrease) 38. Largest individual Investing cash inflow line item description 39. Largest individual Investing cash outflow line item description 40. Largest individual Financing cash inflow line item description 11 0 38. Largest individual Investing cash inflow line item description 39. Largest individual Investing cash outflow line item description 40. Largest individual Financing cash inflow line item description 41. Largest individual Financing cash outflow line item description 42. Amount of dividends declared during the year 43. on which financial statement did you find this? 44. Amount of dividends paid during the year 45. On which financial statement did you find this? 46. Briefly explain why the dividends declared amount may not be the same as dividends paid. 81% 10% 9% 100% 33% 2020 19.164.6 2,327.1 2.026.3 23518.0 7.694.9 10.764.0 430.3 1.431.3 1.679.6 278.7 22.278.8 3225 1,561.7 46% 2% 6% 7% 1% 95% 1% 2019 $ 21,544.4 881% 2.875.0 11% 2,0892 8% 26.508.6 100% 8,5269 32% 10.493.6 40% 371.0 1% 1,377.3 5% 1.824.1 7% 135.8 1% 22.728.7 86% 298.0 1% 4,077.9 15% 06 6228 2% 96.5 0% (331.0) (1%) 2018 $ 19,690.3 79.7% 2.652.2| 10.7% 2.377.0 9.6% 24,719.5 100.0% 7.930.7 | 32.1% 9.472.2138.3% 554.9 2.2% 1,247.0 5.0% 1,708.2 6.9% 224.4 0.9% 21.137.41 85.5% 301.2 1.2% 3883.3 15.7% 1376.4 5.6% 4992 2.0% 191.4 0.8% (170.3)] (0.7%) 7% 0% 39.7 (437.0) 0% 0% (2%) A la Vertical Analysis 95% 2020 22,278.8 322.5 1,561.7 1% 7% 0% 0% 39.7 0% (437.0) (2%) 1,164.4 5% 239.7 1% 924.7 4% (3.6) (0%) 928.3 4% 2019 22,728.7 86% 298.0 1% 4,077.9 15% 0% 622.8 2% 96.5 0% (331.0) (1%) 4,466.2 17% 871.6 3% 3,594.6 14% (4.6) (0%) 3,599.2 14% 2018 21,137.4 85.5% 301.2 1.2% 3,883.3 15.7% 1,376.4 5.6% 499.2 2.0% 191.4 0.8% (170.3) (0.7%) 5,780.0 23.4% 1,262.0 5.1% 4,518.0 18.3% (0.3) (0.0%) $ 4,518.3 18.3% $ $ $ $ 0.79 0.79 2.95 2.92 $ $ 3.27 3.24 $ $ 1,172.8 1,181.8 1.221.2 1.233.2 1,382.7 1.394.6 2018 S che % Che 2019 %Chg 2020 $ Che CONSOLIDATED STATEMENTS OF EARNINGS fin millions, except per share data) Net revenues Company-operated stores Licensed stores Other Total net revenues Product and distribution costs Store operating expenses Other operating expenses Depreciation and amortization expenses General and administrative expenses Restructuring and impairments Total operating expenses Income from equity investees Operating income Gain resulting from acquisition of joint venture Het gan resulting from divestiture of certain operations Interest income and other net Interest expense Earrings before income taxes income tax expense $ 19,1646 2,3271 20263 23,518,0 7,8949 10,764 0 4303 1.4313 1.6796 278.7 22,2788 3225 1,5017 ($2,380) (1196) ($548) (1996) (5631 (396) (S2.991) (11%) (5832) (10%) $270 396 S59 16% $54 496 (S145) (89) $143 105 (5450) 123) $25 8% (S2.516) (62%) $ 21,5444 28750 2,089.2 26,508,6 8,526.9 10.4936 3710 1,3773 1 8241 135.8 22.7287 2980 4,0779 $1,854.1 996 $223 8% (5288) (1296) $1,789 7% $596 896 $1,021 11% ($184 (3396) $130 10% $116 7% (889) (39%) 51,591 8% (Sa) (190 $195 5% (1,376 4) $124 25% 1595509 15161) 94 ($1314) (28% 53901311 $ 19,690 3 2,6522 2,377.0 24,719,5 7,930.7 9,4722 5549 1,2470 1,708 2 224.4 21,1374 301 2 3,8833 1,3784 4992 1914 (1703) 5,780.0 1,2820 10 39.7 (4370) 1,1044 2397 (622.8) (100%) (557) 159%) 1$ 106) 32% (99,302) (74%) 15632117286) 6229 965 (3310) 4.4062 8716 278.7 22,278 8 322.5 1,5617 $143 105% ($450) (296) $25 896 152,516) (62%) 1358 22,7287 2980 4,0779 Restructuring and impairments Total operating expenses Income from equity investees Operating income Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain operations Interest income and other, net Interest expense Earnings before income taxes Income tax expense Net earnings including noncontrolling interests Netloss attributable to noncontrolling interests Net earnings attributable to Starbucks Earnings per share-basic Ewings per share-diluted Weighted average shares outstanding Basic Diluted 39.7 (4370) 1.1644 239.7 9247 (3.6) 9283 (622.8) (100%) (557) (59 (5106) 32% ($3,302) (741 $632) (229) 152,670) 174%) 51 12296 $(2.670.9) 1746) 6228 965 (3310) 4,416.2 8716 3,5946 (46) 3,5992 2.95 292 (989) (3996) $1,591 89 (53) (136) $195 5% (1,3764) 10 S124 25% ($95 (5096) IS161) 94% IS1,314) 123%) ($390) (1961 19923) (20%) (S4) 1433% (5919) (2016) 2244 21,1374 3012 3.8833 1,3764 4992 191.4 (1703) 5,7800 1,2620 4.5180 (0.3) $4,5183 $ $ $ $ 0.79 0.79 S $ $ $ 327 3.24 1,1728 1 1818 1.2212 1,233 2 1,3827 1.3946 Vertical Analysis Sep 29 2019 293 $ 2,686.6 14% 105 0% 8792 5% 1529.4 4882 34 5,653.9 220.0 1% 396.0 2% 6,4317 33% 0.0 09 1,765.8 92 479.6 24 7818 3,430.8 18% $ 19219.6 100% STARBUCKS CORPORATION 10-K Sep. 27, 2020 Consolidated Balance Sheets fillons, execar por share ots) Sep 27. 2020 Current ascets Cach and coch equivalente $ 4,350.9 15% Short-term investments 2812 Accounts receivable, het 883.4 3% Inventorice 15514 5% Prepaid expenses and other current secto 739.5 3% Total current soseto 7,806.4 27% Long-term investments 206.1 Equity investments 478.7 2% Property, plant and equipment, net 6,2414 21% Operating lesse, right-of-use asset 8,134.1 28% Deferred income taxes, not 1.789.9 6% Other long-term ascets 568.6 2% Other intangible assets 552.1 2% Goodwill 3.5972 12% TOTAL ASSETS 329374.5 100% LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 997.9 34 Accrued liabilities 1.160.7 4% Accrued payroll and benefits 636.0 2% Income taxes payable 38.2 02 Current portion of operating leace liability 1,248.8 4% Stored value card liability and current portion of deferred revenue 1,4565 5% Short-term debt 438.8 12 Current portion of long-term debt 1,249.9 4% Total current liabilities 7.346.8 25% Long-term debt 14,659.6 50% Operating lease liability 7,661.7 26% Deferred revenue 6,598.5 224 Other long-term liabilities 907.3 34 Total liabilities 37.173.9 127% Shareholders' deficit: 0 Common stock ($0,001 par value) - authorised, 2.400.0 choreo: issued and outstanding, 1.173.3 and 1,184,6 chares, respectively 1.2 04 Additional poid-in capital 373.9 15 Retained deficit (7.815.6) (272) Accumulated other comprehensive loss (364.61 (13) Total choreholdero' deficit 61.805.1) (273) Noncontrolling interests 5.7 0% Total deficit 17,198.4 1273 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) 1293745 100% 0 0 62 $ 1,189.7 1,753.7 664.6 1,291.7 0.0 1,263.0 0.0 0.0 6,168.7 11,167.0 0.0 6,744.4 1370.5 25,450.6 3. 7% 04 3% 0% 0% 32% 58% 0 35% 7% 132% 0 12 41.1 04 (5.7112) (30%) 1503.31 (33) (6.232.2) (32) 12 04 16,231.0.32391 $19.213.6 100% STARBUCKS CORPORATION 10- Sep. 27, 2020 Horizontal Analysis Sep 29. 2019 $ 2,686.6 70.5 $79.2 1,529.4 5.653.2 220.0 396.6 6,417 0.0 1,765. 479.6 781.6 3,490.8 $ 19,219.6 $ 1,189.7 1,753.7 5 Consolidated Balance Sheets millions, except footnotes) Sep 27. 2020 Cha Cha Carh and careialonu $ 11 4,350. $1,664 62% $211 2012 299% Short-terminvartment Account receivable et 883.4 $4 04 14 1,551.4 14 Interi $22 Propodother currenture 7345 $251 51% 15 Tet al current are 7,806.4 $2,153 38% IT Longtermimatment 206.1 (514) 476,7 Equity invartment $83 21% Property, plantandeguipment, et 6,241.4 (190) 39) 201 Operatinglesta we wret 3.134.1 $8,134 21 Deferred income taxe, et 1,789.9 $28 194 22 Other lengtermuret 5686 $89 13% 23 Otherintangible wrotu 5$2.1 (12301 (2930 24 Gaduill 3.597.2 $106 3% 25 TOTAL ASSETS $29.3745 310, 155 53% LIABILITIES AND SHAREHOLDERS' EQUITTI(DEFICIT) 23 Current Gabiti Account payable $ 497.9 ($132) (16%) Accredibilities 1,160.7 ($593) (343) 31 Aerupayrolland 64.0 $31 5% 32 Income taxe payable 982 ($1.194) (82%) 33 Current portion of operating to reliability 1,243.8 34 Steredwalve card liablety and current partion of deferred 1.456.5 $188 15% 35. Shart-term dobt 36 Gurra portion of lenorm dobt 1249.9 37 Total currentlisbiliter 7,346. $1,178 19% 34 Lontar det 14,6596 $3,493 312 39 Operating lewe liability 7,661.7 40 Deferred 6,598.5 (3146) Otherlantarmobilita 907-2 18452 (343 42 Tata Sabatier 37.172.9 $11,723 46% 47 Shareholder deficit Cammanstock ($0.001 a value)-autharira d. 2,400.0 haren unvedondatrendin. 1,179.341,184.6sharer, 44 Perpectively 12 $0 0% 45 Additional paid in capital 373 $333 810% 46 Retained defien (7,8153 1010 47 Accumulate other comprobarivela 364.5) $139 40 Totalarealder deficit (28% 67,805.13 ($1.573) 25% 49 Hos centraliingiatorer 5.22 35 375% 50 Total defick 799,00 31568 25% 51 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/COEFICITUS29.3745 $10.155 53% 1,241.7 0.0 1,269.0 0.0 DO 6.168.7 11,167.0 0.6 6,744.4 1,370.5 25.450.6 1.2 355 41.1 (5.771.2) (5032) (4.232.2) 1.2 16,231.03 $122196 Sep 27. 2020 Sep 23. Sep 30. 2018 2019 $ 324.70 $ 3,594,60 % 4,518.00 1,503.20 (25.80) (280.70) 227.70 1,449.30 (1.495.40) (250.60) 216.80 1,305.90 714.90 (242.80) 226.80 (1,376.40) (499.20) 250.30 37.60 248.60 (622.80) 308.00 10.50 1.197.60 454.40 24.50 142.60 45.30 75.60 13.40 (2.70) (10.30) (317.50) (1,214.60) (210.80) (1,231.40) 280.50 1597.80 (197.70) (173.00) 922.00 1,237.10 31.90 (30.50) 131.00 (41.20) (839.50) 146.00 3.91.60 7,109.40 First End OPERATING ACTIVITIES: Net earnings including noncontrolling interests Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Deferred income taxes, net Income earned from equity method investees Distributions received from cquity method investees Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain retail operatione Stock-based compensation Goodwill impairments Non-cach lease cost Loss on retirement and impairment of rets Other Cash provided by/(used in) changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses and other current assets Income taxes payable Accounts payable Deferred revenue Operating lease liability Other operating assets and liabilities Net cash provided by operating activities INVESTING ACTIVITIES: Purchases of investments Sales of investments Maturities and calls of investments Acquisitions, net of cash acquired Addition to property, plant and equipment Net proceeds from the divestiture of certain operations Other Net cach used in investing activities FINANCING ACTIVITIES: Proceeds from issuance of short-term debt Repayments of short-term debt Proceeds from issuance of long-term debt Repayments of long-term debt Proceeds from souance of common stock Cash dividends paid Repurchase of common stock Minimum tox withholdings on share-based awards Other Net cash provided by used in) financing activities Effect of exchange rate changes on cachond cash equivalente Net increase(decrease in cash and coch equivalente CASH AND CASH EQUIVALENTS: Balnina narind 31.00 (141.10 5,047.00 16.40 11.937.80 (443.30) 186.70 73.70 (190.40) 298.30 59.80 (1,483.60) (131.30) 459.00 45.30 (1,311.30) (1,976.40) 608.20 5.60 (2 361.50) (1,806.60) 684.30 (56.20 1010.80) 144.40 (1.711.50 1,406.60 (367.70) 4,727.60 5,584.10 298.80 (1,923.50) (1,698.30) (91.30) (37.701 1713.30 64.10 1664.30 1.936.00 (350.00) 403.80 (1,761.30) (10,222.30) (111.60) (17.500 (10,056.90) 149.00 (6.063.70) 153.30 (1743.40) (7.133.50) (62.70) (41.20 (3,242.80) 39.50 6,294.00 2696 6 8763 2460 4 50 51 52 52 (1,688.30) (31.90) 137.00 1,713.30 64.70 1,664.30 (10,222.30) (11160) (1750 (10.056.90) (49.00) 16,063.70) (7.138.50) [62,701 141.20) (3,242,80) 39.500 6,234.00 55 56 ST Repurchase of common stock Minimum tax withholdings on chare-based worde Other Het cock provided by wood is financing octivities Effect of exchange rate changes on cachond cash equivalents Net in cel(decrease in cash and cash equivalente CASH AND CASH EQUIVALENTS: Beginning of period End of period SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for Interest, not of capitalised interest inconet 2.686.60 $350.30 8.75630 2,686 60 2.462.30 8.756.30 58 55 40 $ $ 336.30 $ 1,639.10 $ 233.50 470.10 $ $ 131.10 1,176.90 a 4 5 7 8 9 10 11 12 13 14 5 18 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 29 Balance, October 1, 2017 Net earnings/(loss) Other comprehensive income/(loss) Stock-based compensation expense Exercise of stock options/vesting of RSUS Sale of common stock Repurchase of common stock Cash dividends declared, 1.32 per share Net distributions to noncontrolling interests Balance, September 30, 2018 Cumulative effect of adoption of new accounting guidance Net earnings/(loss) Other comprehensive income/(loss) Stock-based compensation expense Exercise of stock options/vesting of RSUS Sale of common stock Repurchase of common stock Cash dividends declared, $1.49 per share Net distributions to noncontrolling interests Balance, September 29, 2019 Cumulative effect of adoption of new accounting guidance Net earnings/loss) Other comprehensive income/loss) Stock-based compensation expense Exercise of stock optionsvesting of RSUS Sale of common stock Repurchase of common stock Cash dividends declared, $123 per share Noncontrolling interest resulting from divestiture Balance, September 27, 2020 Accumulated Other Comprehensive Shareholders' Noncontrolling Income!(Loss) Equity (Deficit) Interests (15560) 5 5,450.10 $ 6.90 $ 4,518.30 (0.30) (17470) (174.70) 253.80 59.40 31.80 (7.208.70) (1,760.50) (0.30) $ (330 30$ 1.169.50 $ 6.30 $ 495.60 3,599 20 (4.60) (173.00) (173.00 311.30 264.90 33.40 (10,131.50) (1,801.60) (0.50) $ (503.30) S 16.232.20 $ 1.20 S 4.80 17.30 928.30 (3.60) 133.90 133.90 252.10 169.90 37.20 (1,675.00) (1.43660) (0.20) 8.30 $ (364.60) S 7.805.10) S 5.70 S Total 5,457.00 4,518.00 (174.70) 253.80 59.40 31.80 (7.208.70) (1,760.50) (0.30) 1.175.80 495.60 3,594.60 (173.00) 311.30 264.90 33.40 (10,131.50) (1,801.60) (0.50) (6.231.00) 17.30 924.70 133.90 252.10 169.90 37.20 (1.675.00) (1.436.80) 8.30 (7 799.40)