Use the annual report (primarily financial statements and notes) for Starbucks for 2016 and answer the following questions. (25 pts)

How to find Starbucks 2016 Annual Report:

- go to http://www.starbucks.com

- click on investor relations (bottom of the page under about us)

- click on annual reports (right hand side of page under Financial Information)

- click on FY16 Annual Report on Form 10K

- HINT: Before you begin answering these questions, scroll through the notes and spend some time familiarizing yourself with what is contained in the notes. This will help you find specific answers and places to look for the following questions.

A. What is included in Starbucks Cash and Cash Equivalents?

B. What types of Short-term investments does Starbucks have and how are they valued?

C. Starbucks discloses Accounts Receivable on the Balance Sheet as a net amount. What does this mean and how did Starbucks come up with the net amount? What amounts would Starbucks show for gross Accounts Receivable in 2016 and 2015 if it didnt show the value at net (give the actual numbers)?

D. How does Starbucks value its inventories? Explain.

E. What does Starbucks mean by showing Property, Plant, & Equipment at a net value? Explain.

F. What is Goodwill, how did it get on the balance sheet, and how is it valued? Does Starbucks amortize its Goodwill? Explain.

G. What is stored value card liability? How does this relate to the principle of revenue recognition? Explain.

H. Starbucks lists Accrued Liabilities as a significant portion of its Current Liabilities. What are Accrued Liabilities and what might be included? Give several examples.

I. What types of Long-term debt is Starbucks issuing, what range of interest rates is being paid by Starbucks, and what range of maturity dates is disclosed on the long-term debt.

J. Does Starbucks engage in Treasury Stock transactions (referred to as a stock repurchase program)? If so, how much Common Stock did it repurchase in 2014, 2015, and 2016? How does it handle this in terms of financial statement disclosure? Explain how this is different from what we learned.

K. Starbucks has four reportable operating segments. What are these segments and what portion of Starbucks net revenues comes from non-Americas segments? Show the computation for 2016, 2015, and 2014.

L. What type of Depreciation does Starbucks use and how long are estimated lives?

M. Who are Starbucks independent auditors? What did the auditors find? Explain.

N. Is Starbucks generating enough cash flows from operations? Explain your logic.

O. Is Starbucks involved in any litigation? Briefly explain what is says about this.

P. When did Starbucks split its stock? What effect did this have on: (1) total stockholders equity; (2) # of shares outstanding; (3) market price of the stock?

Q. Explain the difference between basic and fully diluted EPS (on the Income Statement).

R. Spend a few minutes scanning the Management Discussion and Analysis section of the report (at the beginning of the Form 10-k). Comment on why you think this section of the report is required by the SEC.

Please explain how you got answers