Be sure also to discuss how Starbucksâ methods for accounting for receivables and evaluating uncollectible receivables, purchase of fixed
assets, and methods of debt financing impact the recording process and presentation of financial statements (Critical Element II). In other words, what are this
companyâs methods for accounting for receivables and evaluating uncollectible receivables? What types of fixed assets are acquired, and what methods are
preferred for debt financing? How do those affect how financial information is communicated?
Specifically, the following critical elements must be addressed:
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 Starbucksâ accounts receivable balances over time.
2. Use basic financial analysis to examine any vertical changes in Starbucksâ accounts receivable balances over time.
3. Analyze how Starbucksâ methods for accounting for receivables and evaluating uncollectible receivables impact the recording process and
presentation of financial statements. In other words, what are this companyâs 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 Starbucksâ fixed assets, intangible assets, depreciation, and amortization
over time.
2. Use basic financial analysis to examine any vertical changes in Starbucksâ fixed assets, intangible assets, depreciation, and amortization
over time.
3. Analyze Starbucksâ 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 Starbucksâ short- and long-term debt over time.
2. Use basic financial analysis to examine any vertical changes in Starbucksâ short- and long-term debt over time.
3. Analyze Starbucksâ method of debt financing. In your analysis, you should address both current and long-term liabilities, including the
issuance of bonds. 2nd deal half page. There are three broad categories of financial ratios: liquidity, solvency, and profitability. Discuss what each category reveals about the company being analyzed. Give examples of ratios that are affected by inventory, and discuss changes a manager might make to improve the financial ratio.
