The Vertical Analysis Of Starbucks Essay

The entries used to record the disposition when the receivables are sold to a factor often detail the cash received plus the service charge. The company can then balance their receivables account. When a credit card company records a credit card

Accounts receivable are amounts owed by customers on account. They result from the sale of goods and services on credit. These receivables are generally expected to be collected within 30 to 60 days. They are typically the most significant type of claim held by a company. Accounts receivable and notes receivable resulting from sales are also known as trade receivables. Accounts receivable resulting from sales are referred to as trade receivables in Alcatel's financial statements.

actual accounts, which can be considered as uncollectible, i.e. those that are already over 90 days. The balance

The allowance for doubtful accounts is lower than last year even though the receivables and the revenue are higher. This does not follow any form of consistency in that case. GAAP only allows the establishment of the allowance for doubtful accounts that are supported by appropriate analyses and that the policy is well documented and applied consistently from period to period. Again, without additional information the consistency item is an issue here.

For my ethnography project, I decided to observe the Starbucks on Rockside Road in Independence, Ohio. My plan was to observe the subculture of Starbucks’ customers. A subculture is defined as a “structured social inequality or, more specifically, systematic inequalities between groups of people that arise as intended or unintended consequences of social processes and relationships.” My question was twofold. Does Starbucks appeal to certain social statuses? And if so, does Starbucks serve as another example of social inequality?

First, the percentage of receivables method, also known as the balance sheet method, will be discussed. This method derives its name from the fact that a balance sheet account is used to estimate the percentage of uncollectible receivables. Even though the estimate comes from the accounts receivable account, two methods are used to establish the estimated amount used. One way is to use a certain percentage of the entire accounts receivable balance based on past experience of what has historically been collected. The second common way to arrive at the estimated amount is to base it on the aging schedule. For example, one percentage amount would be used for current billings, a second percentage amount would be used for amounts that are over 30 days but less

Starbucks’ financial position can be figured out by studying their balance sheet. A financial item that can be found on the balance sheet is accounts receivable. Accounts receivable refers to money owed to a organization by its borrowers. Horizontal analysis can be used to assess an item on the balance sheet. Starbucks’ accounts receivable increased from $561.4 million in 2013, to $631 million in 2014. That is a 12% increase in just a year. Accounts receivable is categorized as an asset on the balance sheet. In 2013 the accounts receivable was 4.8% of total assets. In 2014, the company saw a 5.8% increase in their total assets. Overall, the accounts receivable jumped up by 12% in 2014. Starbucks allowance for uncollectable receivables is calculated based on histroalical experience, credit history, and application of the specific identification method. Uncollectable receivables are not available on Starbucks balance sheet. There are however, fixed aseets on the balance sheet such as plant, equipment, and property.

Starbucks is known for their Frappuccino’s; unfortunately they are on a downward spiral in sales due to competitors such as McDonalds. In 2008 Starbucks admits to its losses due to their competitors. “Company executives now freely admit that such thinking is largely to blame for the woes that led to Tuesday’s announcement that Starbucks will close 600 U.S. stores and eliminate thousands of jobs. The coffee giant’s missteps have come at a spectacularly bad time, hitting as the economic slump deepens and consumers are seeing their discretionary spending eaten up by rising gas prices and grocery bills (Linn).”

Starbucks financial statements were analyzed for the fiscal year ended September 27, 2015. Like all public companies, annual and quarterly financial statements are required to allow regulators and other interested parties to analyze the financial status and management decision making of the company. This analysis focuses on the results of Starbucks most recent published annual report containing their balance sheets, statement of earnings and cash flows. These statements will be analyzed against the results of one of its competitors, Dunkin Donuts, to investigate how the two companies compare to each other. It was noted that Starbucks and Dunkin Donuts do not have corresponding fiscal year ends. The data therefore is not directly comparable since the reports do not reflect the same time period of data but should provide additional insight. The paper will attempt to provide a brief analysis of Starbucks operations in terms of its liquidity, leverage, activity, profitability and growth ratios used by analysts in the industry.

When an account receivable is determined to be uncollectable it is no longer qualified as an asset and should be written off. A write off reduced the balance of the customers

11. Accounts receivable turnover and days sales in accounts receivable for the last three years:

In order to confirm the accounts receivable balances, I decided to use positive confirmations since this was my first time auditing the company and the collateral for the loan would be the receivables. The confirmations helped to verify the accuracy and existence of the accounts. I also calculated the Receivables Turnover Ratio in order to better evaluate the overall success of collection on accounts. The sample size that I chose was determined by the factors of tolerable misstatement, inherent risk, control risk, achieved detection risk

Starbucks Corp. 's inventories declined from 2013 to 2014 but then increased from 2014 to 2015 exceeding 2013 level due to various factors such as inflation, fluctuating demand and forecasting measures.

The determinants of Starbucks profitability over time are variable costs and fixed costs. “A variable cost is a cost that change in direct proportion to a change in the level of activity (dict). Variable costs for Starbucks would include labor, coffee beans, dairy, and plastic products. A fixed cost is indirect costs of business expenses that remain unchanged (dict). Fixed costs for Starbucks include rent, taxes, and insurance as well as advertising. In the figure below (fig 1) we have Starbucks financial data in millions for the year of 2015. This includes their operating expenses, net revenues, such as company-operated stores, licensed stores, CPG, food service. It also includes their total net revenues and their balance sheet. As we can see “Operating costs dropped in the fiscal year

Corporate Strategy fundamentally is concerned with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of business.[1] In the case of Starbucks the corporate strategy they have implemented is unique to their industry which has allowed them to differentiate from their competitors and is summarized best by Howard Schultz CEO of Starbucks, “We’re in the people business serving coffee,[2]” high quality specialty coffee and related products in a European café environment. It is clear Starbucks is in a growth strategy utilizing three key techniques that support its Mission, “to inspire and nurture the human spirit – one person, one cup and