1 STARBUCKS FINANCIAL REPORTING ANALYSIS STARBUCKS FINANCIAL REPORTING ANALYSIS Agostinho Lopes, Jr MBA 503 – Financial Reporting and Analysis Southern New Hampshire University
2 STARBUCKS FINANCIAL REPORTING ANALYSIS Abstract Conducting a financial statements analysis, help understanding of the financial performance and position of a company requires to. Among the different tools for financial statement analysis, horizontal and vertical analysis are very popular and widely used. Vertical analysis is the proportional analysis of a financial statement, where each line item on a financial statement is listed as a percentage of another item (accounting tools, 2019). This means that every line item on an income statement is stated as a percentage of gross sales, while every line item on a balance sheet is stated as a percentage of total assets (accounting tools, 2019). This analysis is mainly a proportional analysis. In vertical income statement, each item in the income statement is represented as proportion to the total sales. In the vertical balance sheet, each item of the balance sheet is represented as proportion to the total assets. Horizontal analysis is the comparison of historical financial information over a series of reporting periods, or of the ratios derived from this information [CITATION Acc17 \l 1033 ] . Such kind of analysis is mainly trend analysis. In horizontal income statement and horizontal balance sheet, the figures are compared over time period against base time period. This paper aims at conducting a study focus on the analysis of the Starbucks Corporation’s financial state by interpreting the company’s financial data. This will include a horizontal and vertical analysis of the account receivables, fixed assets, and debt financing of the Starbuck Incorporation. The horizontal and vertical analysis of the accounts receivables, fixed assets, and debt financing of the Starbucks will help assess the shift and trend of the balances of accounts receivables, fixed assets, and debt financing. Furthermore, the study will look into
3 STARBUCKS FINANCIAL REPORTING ANALYSIS Starbucks financial performance using financial ratios such as, liquidity, solvency, and profitability ratios and analysis what these ratios is telling about the company. Afterwards this will encompass a summary GAAP reporting policies with focus on the importance of accounting regulations and reporting requirements in the preparation of financial reports. Horizontal and Vertical Analysis of Account Receivables, Fixed Assets & Debt Financing Account Receivables Accounts receivable is the amount of money owed to a company for the services and/or good provided. Accounts receivable is composed of the companies invoices sent to the customer for the good and/or services provided in a period in time. The account receivables balance of the Starbucks is mainly comprised of receivables for sales of products and equipment to the licensees, and CPG [CITATION Placeholder1 \n \l 1033 ] . The allowance for doubtful accounts is recognized and calculated based on the specific identification method. For the year ended
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- Spring '13
- Balance Sheet, Generally Accepted Accounting Principles, Starbucks Corporation