Case #1: Starbucks

Read the annual report for Starbucks to do the whole part of the income statement and follow the requirement for the case study.

1. Find the “Consolidated Statements of Income” on page 48. What does the Income statement tell us?
2. Does the Income Statement measure activity as of a point in time or does it measure activity over a period of time?
3. What are the two basic elements of the Income Statement and how do they relate to measuring Net Income?

Refer to the Starbucks Corporation 2018 Annual Report to address the following questions. You can find this at:

https://s22.q4cdn.com/869488222/files/doc_financials/annual/2018/2018-Annual-Report.pdf

Your answers to each question should not be longer than one or two sentences and your entire deliverable should be no longer than two pages of text (one page would be preferable).

General

1. Why does Starbucks produce an Annual Report? Is it only to comply with regulations?

Balance Sheet

1. Find the “Consolidated Balance Sheets” on page 50. What does the Balance Sheet tell us?
2. Does the Balance Sheet measure activity as of a point in time or does it measure activity over a period of time?
3. What are the three basic elements of Starbucks Balance Sheet?
4. What is the Balance Sheet Equation?
5. Which balance sheet elements tell us about Starbucks’ “investing” activities and which tell us about Starbucks’ “financing” activities?

Income Statement

1. Find the “Consolidated Statements of Income” on page 48. What does the Income Statement tell us?
2. Does the Income Statement measure activity as of a point in time or does it measure activity over a period of time?
3. What are the two basic elements of the Income Statement and how do they relate to measuring Net Income?

Notes to the Financial Statements

1. Find the “Notes to Consolidated Financial Statements.” What do the notes tell us?

Auditor’s Report

1. Find the “Report of the Independent Registered Pubic Accounting Firm” on page 77. What does this report tell us?