This report provides an analysis of the financial statement of Starbucks for the year 2016, including revenue, expenses, inventory, property, plant and equipment, and cash flow. It also highlights any material misstatements and discrepancies between the SEC 10K form and the company's annual report.
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0Report on Analysis of the Financial Statement of Starbucks Report on Analysis of the Financial Statement of Starbucks Name of the Student Name of the University Author Note
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1Report on Analysis of the Financial Statement of Starbucks Memorandum To: Starbucks Corporation Manager From: Auditor Date: XXXX Subject: To analysis the Audit report of Starbucks for the year 2016. To analysis the 10K form of the Starbucks Corporations in-comparison to the Annual report represented. The analysis is done for the 2016 10k form. Considering the Financial Statement of 2016 analyzing the Income statement for 2016. Total revenue has increased by $ -2153.2mn. The total operating expenses had increased by $1,650.60mn. This is due to number of store increased by the company in 2015-16. Even the occupancy cost has increased due to the yearly increment tin the lease amount (Sec.gov, 2019). The fluctuation of foreign currency exchange has a great role in the revenue projections. Mentioned in the audit report the expenses matches for 2016 and 2015 the item linked are as follow: The earning before tax is represented by the US and Foreign revenue factor as shown below:
2Report on Analysis of the Financial Statement of Starbucks The analysis of the Balance sheet for year 2016 includes change in inventory of $72.10 mn whereas there is a misrepresentation in the audit 10 k form that the company has inventory of $39.6 million as of October 2, 2016. They are showing the inventory misstatement because it can affect the profitability of the business. The Property, plant and equipment for the year 2016 have a difference of $ 445.50 Mn. The P,P&E are shown below with differentiation. The net disposition charges of $25.1 million and $12.5 million for 2016 and 2015.Net impairment charges of $24.1 million and $25.8 million fiscal 2016 & 2015. The nature of the underlying asset that is impaired or disposed of will determine the operating expense line on which the related impact is recorded on our consolidated. The impairment is based on the judgement of the management that may not be true as per auditor. The management has followed straight line method of depreciation for the assets but same needs to be accessed by the auditor whether the accounting practice is accurate or not as per the nature of the business. The effect of the exchange rate on the cash and cash equivalent is in negative of -$3.5 mn. The Change in the year 2016 to 15 show an increment of $598.70 mn. The period of recording the exchange rate needs to which is followed by the management as a minor
3Report on Analysis of the Financial Statement of Starbucks change in the exchange rate can lead to material misstatement in the balance sheet of the financial statements (Campbellet al2016). The amount generated by proceeds from issuance of common stock was $160.7 mn which is less than what was gained in 2015 around $ 190 mn. Cash out flow is majorly shown in Cash dividends paid and Repurchase of common stock to be around (1,178.0) and (1,995.6) respectively. The Account payable is increasing by $46.6 mn which is matching with the annual report posted by the company on their corporate website. The auditor needs to check the invoice so the sale and purchase can be to understood the credit sales and purchases are appropriate or not (Dyrenget al. (2016). This analysis puts light on the annual report of the company having some material misstatement in comparison to the SEC 10 k form and the Annual report of the company on the corporate website.
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4Report on Analysis of the Financial Statement of Starbucks Reference Campbell, K., & Helleloid, D. (2016). Starbucks: Social responsibility and tax avoidance. Journal of Accounting Education,37, 38-60. Dyreng, S. D., Hoopes, J. L., & Wilde, J. H. (2016). Public pressure and corporate tax behavior.Journal of Accounting Research,54(1), 147-186. Sec Gov (2019). https://www.sec.gov/Archives/edgar/data/829224/000082922416000083/sbux 1022016x10xk.htm#s92F29087F8CFADEB9B3232657B89E306 [Accessed 18 Feb. 2019].