Starbucks Essay Example for Free

Starbucks Essay Access the Internet to acquire a copy of the most recent annual report for the publicly traded company used to complete the Financial Reporting Problem, Part 1 assignment due in Week Six. Analyze the information contained in the company’s balance sheet and income statement to answer the following questions: †¢Are the assets included under the company’s current assets listed in the proper order? Explain your answer. The current assets should be listed in the order of liquidity. The assets which can be easily converted into cash are listed first. Cash is already in liquid form and thus is recorded first. Next to follow are cash and cash equivalents (like marketable securities etc.) which can be very easily converted into cash are recorded next. The other current assets to follow the list are Accounts receivable, Inventory, Prepaid expenses and other current Assets. Starbucks is following the same while listing the current assets in the Balance Sheet. †¢How are the company’s assets classified? Assets are classified as Current Assets and Fixed Assets. Current Assets are those assets out of which the benefit derived is for a period less than one year. Fixed assets are those assets out of which the benefit derived is for a period more than 1 year. †¢What are cash equivalents? Cash equivalents are investment securities that are short-term, have high credit quality and are highly liquid. Cash and Cash equivalents of Starbucks as of 2013-09-29 is $2,575.70 million. †¢What are the company’s total current liabilities at the end of its most recent annual reporting period? The total Current liabilities of Starbucks as of 2013-09-29 are $5,577.30 million. †¢What are the company’s total current liabilities at the end of the previous annual reporting period? The total Current liabilities of Starbucks as at the end of the previous annual reporting period 2012-09-30 is $2,209.80 million. †¢Considering all the information you have gathered, why might this information be important to potential creditors, investors, and employees? The financial statements provide useful information to various parties for decision making. Creditors: Creditors are those who provide credit to the company. From the financial statements the creditors assess the liquidity position of the company. The current assets and the current liabilities are looked into to know the liquidity position. If the current assets to current liabilities are 2 times to 1, then the creditors would be interested to extend credit to the Company. Investors: Investors are those who provide capital to the Company. The financial statements provide the profitability position of the Company. The investors are interested to know the profit margin, the dividend paid in the recent years, the growth rate in earnings etc. The information gathered above does not provide these details which are helpful for investors. Employees: Employees of the company are interested to know the profitability position of the Company based on which they can expect a bonus from the Company. The financial statements should be thoroughly analyzed for various decision to be taken which are u seful to various parties and situations.