On October 2, 2011, Starbucks Corporation reported, on its Form 10-K, the follow

Question

On October 2, 2011, Starbucks Corporation reported, on its Form 10-K, the following (in millions):

                                                                                                    2011                           2010
                                    Total expenses before taxes                 $10,452.40         $9,759.10
                                    Operating income                                    1,728.50         1,419.40
                                    Net earnings                                             1,248.00              948.30

What amount of revenues did Starbucks report for the year ending October 2, 2011?

Explanation / Answer

For the purpose of calculating Total Revenue as on October 2, 2011, we need to consider the following formula:

Net Earnings= Total Revenue - Total Expenses before tax - Tax Expense

Step 1: Finding the tax expense

Tax Expense = Operating Income - Net Earnings

Tax Expense = $ 1728.50 - $ 1248

Tax Expense = $ 480. 50

Step 2: Finding the Total Revenue

Net Earnings= Total Revenue - Total Expenses before tax - Tax Expense

Total Revenue (TR) =Net Earnings + Total Expenses before tax + Tax Expense

TR = $ (1248 + 10452.40 + 480.50)

Therefore, Total Revenue = $ 12180.90

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