need to be completed and not copied and pasted from any websites unless cited Us
ID: 2632135 • Letter: N
Question
need to be completed and not copied and pasted from any websites unless cited
Using the concepts from this course, you will analyze the strengths and weaknesses of the company and write a report either recommending or not recommending purchase of the company stock.
The completed report should include:
This report should be eight to ten pages long (excluding title page and reference pages) using APA 6th edition formatting guidelines. Support your findings and recommendations with evidence from at least five scholarly resources,.
Explanation / Answer
Pro Forma Financial Statements
The below are the pro forma income statement and balance sheet of Starbucks:
Pro Forma Income Statement (In Millions of US Dollars)
Particular
Sep 29 2013
Forecast
2014
2015
Revenue
14,892.20
16381.42
18019.56
Cost of Goods Sold
6,382.30
7020.53
7722.58
Gross Profit
8,509.90
9360.89
10296.979
Selling General & Admin Expenses, Total
5,325.00
5,325.00
5,325.00
Depreciation & Amortization, Total
621.4
621.4
621.4
Other Operating Expenses
356.2
356.2
356.2
Total Operating Expenses
6,302.60
6,302.60
6,302.60
Operating Income
2,207.30
3,058.29
3,994.38
Interest Expenses
-28.1
-28.1
-28.1
Interest And Investment Income
18.8
18.8
18.8
Net Interest Income
-9.3
-9.3
-9.3
Income (Loss) On Equity Investments
251.4
251.4
251.4
Currency Exchange Gains (Loss)
-1.8
-1.8
-1.8
Other Non-Operating Income (Expenses)
26.5
26.5
26.5
EBT, EXCLUDING UNUSUAL ITEMS
2,474.10
3,315.79
4,251.88
Merger & Restructuring Charges
0
0
0
Impairment Of Goodwill
0
0
0
Gain (Loss) On Sale Of Investments
80.1
80.1
80.1
Gain (Loss) On Sale Of Assets
0
0
0
Other Unusual Items, Total
-2,784.10
-2,784.10
-2,784.10
Legal Settlements
-2,784.10
-2,784.10
-2,784.10
EBT, INCLUDING UNUSUAL ITEMS
-229.9
611.79
1,547.88
Income Tax Expense
-238.7
52.61
133.12
Minority Interest In Earnings
-0.5
-0.5
-0.5
Earnings From Continuing Operations
8.8
559.18
1,414.76
Net Income
8.3
558.68
1,414.26
A pro forma balance sheet is as given below:
Pro Forma Balance Sheet
Particular
Sep 29 2013
Forecast
2014
2015
Assets
Cash And Equivalents
2,575.70
2704.5
2839.7
Short-Term Investments
658.1
691.0
725.6
Trading Asset Securities
0
0
0
Total Cash And Short Term Investments
3,233.80
3,395.49
3,565.26
Accounts Receivable
561.4
589.5
618.9
Total Receivables
561.4
589.5
618.9
Inventory
1,111.20
1166.8
1225.1
Prepaid Expenses
275.2
289.0
303.4
Deferred Tax Assets, Current
277.3
291.2
305.7
Other Current Assets
12.5
13.1
13.8
Total Current Assets
5,471.40
5745.0
6032.2
Gross Property Plant And Equipment
7,782.10
8171.2
8579.8
Accumulated Depreciation
-4,581.60
-4810.7
-5051.2
Net Property Plant and Equipment
3,200.50
3360.5
3528.6
Goodwill
862.9
906.0
951.3
Long-Term Investments
554.8
582.5
611.7
Deferred Tax Assets, Long Term
967
1015.4
1066.1
Other Intangibles
274.8
288.5
303.0
Other Long-Term Assets
185.3
194.6
204.3
Total Assets
11,516.70
12092.5
12697.2
Liability
Accounts Payable
491.7
516.3
542.1
Accrued Expenses
1,127.00
1183.4
1242.5
Current Income Taxes Payable
125
131.3
137.8
Other Current Liabilities, Total
2,979.90
3128.9
3285.3
Unearned Revenue, Current
653.7
686.4
720.7
Total Current Liabilities
5,377.30
5646.2
5928.5
Long-Term Debt
1,299.40
1364.4
1432.6
Minority Interest
2.1
2.2
2.3
Deferred Tax Liability Non-Current
10.1
10.6
11.1
Other Non-Current Liabilities
347.6
365.0
383.2
Total Liabilities
7,034.40
7388.3
7757.7
Common Stock
0.8
0.8
0.9
Additional Paid In Capital
282.1
296.2
311.0
Retained Earnings
4,130.30
4336.8
4553.7
Comprehensive Income And Other
67
70.4
73.9
Total Common Equity
4,480.20
4704.2
4939.4
Total Equity
4,482.30
4704.2
4939.4
Total liabilities and equity
11,516.70
12092.5
12697.2
Ratio Analysis for the Last Fiscal Year
A ratio analysis of the last fiscal year in concern of Starbucks is as follows:
Liquidity Ratio: A liquidity ratio is useful to assess the change in a firm
Pro Forma Income Statement (In Millions of US Dollars)
Particular
Sep 29 2013
Forecast
2014
2015
Revenue
14,892.20
16381.42
18019.56
Cost of Goods Sold
6,382.30
7020.53
7722.58
Gross Profit
8,509.90
9360.89
10296.979
Selling General & Admin Expenses, Total
5,325.00
5,325.00
5,325.00
Depreciation & Amortization, Total
621.4
621.4
621.4
Other Operating Expenses
356.2
356.2
356.2
Total Operating Expenses
6,302.60
6,302.60
6,302.60
Operating Income
2,207.30
3,058.29
3,994.38
Interest Expenses
-28.1
-28.1
-28.1
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