Analyze starbucks methods for fixed asset

Assignment Help Financial Management

Reference no: EM132096016

Final Project Assignment -

Overview -

For your final project, you will complete a financial analysis of a particular company's financial statements. You will assume the role of an analyst in a fictional company that is looking to glean what it can from the methods and business decisions used at this company. In determining the overall financial health of the company, you will demonstrate an understanding of both the financial calculations that go into financial statements as well as the meaning behind the numbers.

Basic accounting skills and knowledge are critical to effective management in today's business environment. Future business leaders need an understanding of the process and rules related to creating financial accounting statements and the meanings behind their individual components in order to make informed business decisions. To demonstrate these skills, you will need to analyze this accounting information in terms of a company's performance and financial health within its industry. This will ultimately help develop your skills as a business leader who is better prepared to manage effectively and make informed management decisions.

This final project addresses the following course outcomes:

Analyze the financial condition of companies by accurately interpreting basic financial information used for informing business decisions
Determine the importance of accounting regulations and reporting requirements in the preparation of financial reports
Conduct basic financial analysis that accurately utilizes horizontal, vertical, and ratio techniques to determine the overall financial health of companies

Prompt -

You are an analyst for Coffee Connection, a coffee shop located in the Midwest. You have been marginally successful as a company. You are now tasked with analyzing the competition and developing benchmarks for the purpose of both improving profitability and expanding operations. You have identified Starbucks as your most similar competitor. Your job now is to use multiple tools to analyze Starbucks' performance and offer well-researched observations concerning the success and challenges faced by Starbucks. You should include an Excel spreadsheet with all calculations.

Specifically the following critical elements must be addressed:

I. Introduction: Provide a concise, professional introduction explaining the purpose of your analysis to your executive.

II. Horizontal and Vertical Analysis: In this section, you will conduct horizontal and vertical analyses for the balance sheet and income statement accounts and report any significant observations for a two-year period. You should include a table of your calculations as an appendix to your analysis. Include all calculations in an Excel document. Specifically discuss the following categories:

A. Accounts Receivable:

1. Use basic financial analysis to examine any horizontal changes in Starbucks' accounts receivable balances over time.

2. Use basic financial analysis to examine any vertical changes in Starbucks' accounts receivable balances over time.

3. Analyze how Starbucks' methods for accounting for receivables and evaluating uncollectible receivables impact the recording process and presentation of financial statements. In other words, what are this company's methods for accounting for receivables and evaluating uncollectible receivables, and how do those affect how financial information is communicated?

B. Asset Acquisition, Depreciation, and Amortization:

1. Use basic financial analysis to examine any horizontal changes in Starbucks' fixed assets, intangible assets, depreciation, and amortization over time.

2. Use basic financial analysis to examine any vertical changes in Starbucks' fixed assets, intangible assets, depreciation, and amortization over time.

3. Analyze Starbucks' methods for fixed asset and intangible asset acquisitions as well as depreciation and amortization, including asset categorization. How do these methods affect the balance sheet, income statement, and statement of cash flows?

C. Debt Financing

1. Use basic financial analysis to examine any horizontal changes in Starbucks' short- and long-term debt over time.

2. Use basic financial analysis to examine any vertical changes in Starbucks' short- and long-term debt over time.

3. Analyze Starbucks' method of debt financing. In your analysis, you should address both current and long-term liabilities, including the issuance of bonds.

III. Ratio Analysis: Analyze and discuss the financial performance of Starbucks using financial ratios. Include your calculations and amounts in a table in the appendix of your paper. Be sure to show your calculation for each ratio.

A. Liquidity Ratios

1. Accurately present and calculate two liquidity ratios for Starbucks.

2. Discuss what the liquidity ratios reveal about Starbucks, including any description of benchmarks, standard measurements, or other types of analysis used once the ratio amount is known.

B. Solvency Ratios

1. Accurately present and calculate two solvency ratios for Starbucks.

2. Discuss what the solvency ratios reveal about the company, including any description of benchmarks, standard measurements, or other types of analysis used once the ratio amounts are known.

C. Profitability Ratios

1. Accurately present and calculate two profitability ratios for Starbucks.

2. Discuss what the profitability ratios reveal about the company, including any description of benchmarks, standard measurements, or other types of analysis used once the ratio amounts are known.

IV. Rules of Financial Reporting: Consider the following governmental and GAAP reporting requirements for what is mandated that Starbucks include in its financial statements:

A. Why is the reporting of control procedures required, and what information is disclosed about Starbucks' control procedures? Justify your response.

B. Why is the reporting of segment information required, and what information is disclosed about Starbucks' segment information? Justify your response.

C. Why is the reporting of estimates and assumptions required, and what information is disclosed about Starbucks' reporting of estimates and assumptions? Justify your response.

D. Why is the reporting of investments and fair value required, and what information is disclosed about Starbucks' investments and fair value reporting? Justify your response.

E. Why is the reporting of leases required, and what information is disclosed about Starbucks' lease structure? Justify your response.

V. Conclusion: Provide a concise, professional conclusion to your executive detailing the findings of your analysis. What can you learn from Starbucks' financial statements and performance about determining the overall health of companies? Include general suggestions for financial improvements.

Attachment:- Assignment File.rar

Reference no: EM132096016

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Reviews

len2096016

8/25/2018 5:13:19 AM

There are two summative assessments for this course. For your first assessment, you will be objectively assessed by your completion of a series of MyAccountingLab homework assignments throughout the course. These will measure your understanding of how to communicate the financial performance of companies and how to prepare basic financial statements.

8/25/2018 5:13:12 AM

Guidelines for Submission: Your financial analysis should adhere to the following formatting requirements: 10–12 pages (not including cover page or appendix), double-spaced, using 12-point Times New Roman font and the most current guidelines for APA formatting. Include all calculations in an Excel document.

8/25/2018 5:13:06 AM

Meets “Proficient” criteria, and explanation expertly balances key detail with brevity for corporate audience. Meets “Proficient” criteria and demonstrates a nuanced understanding of how to interpret horizontal changes in accounts receivable balances over time. Meets “Proficient” criteria and demonstrates a nuanced understanding of how financial methods impact the recording process and presentation of financial statements. Meets “Proficient” criteria and demonstrates a nuanced understanding of how to interpret horizontal changes in fixed assets, intangible assets, depreciation, and amortization over time.

8/25/2018 5:13:00 AM

Meets “Proficient” criteria and demonstrates a nuanced understanding of how financial methods impact the balance sheet, income statement, and statement of cash flows. Meets “Proficient” criteria and demonstrates a nuanced understanding of how to interpret horizontal changes in short- and long-term debt over time. Meets “Proficient” criteria and demonstrates a nuanced understanding of how financial methods impact financial statements. Meets “Proficient” criteria and demonstrates a nuanced understanding of ratio techniques used for financial analysis.

8/25/2018 5:12:55 AM

Meets “Proficient” criteria and demonstrates a nuanced understanding of what is revealed about the financial condition of companies through key ratios. Meets “Proficient” criteria and demonstrates a nuanced understanding of ratio techniques used for financial analysis. Meets “Proficient” criteria, and justification demonstrates a nuanced understanding of the importance of rules and regulations in accounting to financial reporting. Meets “Proficient” criteria and demonstrates a nuanced understanding of how financial analysis leads to determinations of the overall financial health of companies. Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy-to-read format.

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