# 2 Page Paper And A Short Vertical And Horizontal Analysis Plus Half Page Discussion Question

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

companyâs 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 companyâ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 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.