this assignment, due in Module Six, you will submit the Ratio Analysis portion of the final project. For this milestone, you will be analyzing the financial
performance of Starbucks using the financial ratios of liquidity, solvency, and profitability (Critical Element III). Include your calculations and amounts in a table in
the appendix of your paper. Be sure to show your calculations for each ratio. You will also discuss what each ratio and ratio category tells the user about the
financial health of the company, including stating appropriate methods for comparison such as benchmarking and trend analysis.
Note: To calculate the ratio amounts you may use the document Key Financial Ratios Explained and Set Up in Excel. This Excel document may also be used for
your final project.
Specifically, the following critical elements must be addressed:
I. Ratio Analysis: Analyze and discuss the financial performance of Starbucks using financial ratios. Include your calculations and amounts in a table in the
appendix of your paper. Be sure to show your calculation for each ratio.
A. Liquidity Ratios
1. Accurately present and calculate two liquidity ratios for Starbucks.
2. Discuss what the liquidity ratios reveal about Starbucks, including any description of benchmarks, standard measurements, or other types
of analysis used once the ratio amount is known.
B. Solvency Ratios
1. Accurately present and calculate two solvency ratios for Starbucks.
2. Discuss what the solvency ratios reveal about the company, including any description of benchmarks, standard measurements, or other
types of analysis used once the ratio amounts are known.
C. Profitability Ratios
1. Accurately present and calculate two profitability ratios for Starbucks.
2. Discuss what the profitability ratios reveal about the company, including any description of benchmarks, standard measurements, or
other types of analysis used once the ratio amounts are known.
FG is preparing its cash budgets for January, February and March. Budgeted data are as follows: November December January February March Sales (units) 750 800 800 850 900 Production (units) 800 800 850 900 950 Direct labour and variable overheads incurred $48,000 $48,000 $51,000 $54,000 $56,000 Fixed overheads incurred (excluding depreciation) $20,000 $20,000 $20,000 $20,000 $20,000 The selling price per unit is $200. The purchase price per kg of raw material is $25. Each unit of finished product requires 2 kg of raw materials which are purchased on credit in the month before they are used in production. Suppliers of raw materials are paid one month after purchase. All sales are on credit. 80% of customers, by sales value, pay one month after sale and the remainder pay two months after sale. The direct labour cost, variable overheads and fixed overheads are paid in the month in which they are incurred. Machinery costing $100,000 will be delivered in February and paid for in March. Depreciation, including that on the new machinery, is as follows: Machinery and equipment $3,500 per month Motor vehicles $800 per month The opening cash balance at 1 January is estimated to be $15,000. Required: Prepare a cash budget for each of the three months January, February and March.
October 21, 2015
12:47 pm
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