answers POST will give thumbs down if other company or the answer is
wrong or not related to the questions)
Please read instructions.
Refer to Tables A-1 through A-5 in Appendix II of the text for
the operational definitions of and formulas for numerous common
financial ratios, including profitability, liquidity, leverage,
activity, and shareholders' return. Using these formulas, complete
at least one ratio from each of the five categories, though you may
apply as many of the ratios for which you can find the required
information in the STARBUCKS financial
reports.
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Table A-2 Liquidity Ratios Ratio 1. Current ratio 2. Quick ratio (or acid-test ratio) 3. Inventory to net working capital Formula Current assets Current liabilities Current assets - Inventory Current liabilities Inventory Current assets - Current liabilities What It Shows The firm's ability to meet its current financial liabilities The firm's ability to pay off short- term obligations without relying on sales of inventory The extent to which the firm's working capital is tied up in inventory
Table A-3 Leverage Ratios Ratio 1. Debt-to-assets 2. Debt-to-equity 3. Long-term debt-to-equity 4. Times-interest-earned (or coverage ratio) 5. Fixed charge coverage Formula Total debt Total assets Total debt Total shareholders' equity Long-term debt Total shareholders' equity Profits before interest and taxes Total interest charges Profits before taxes and interest + Lease obligations Total interest charges + Lease obligations What It Shows Total borrowed funds as a percentage of total assets Borrowed funds versus the funds provided by shareholders Leverage used by the firm The firm's ability to meet all interest payments The firm's ability to meet all fixed- charge obligations including lease payments
Table A-4 Activity Ratios Ratio 1. Inventory turnover 2. Fixed-assets turnover 3. Total assets turnover 4. Accounts receivable turnover 5. Average collecting period Table A-5 Shareholders' Return Ratios Ratio 1. Dividend yield on common stock 2. Price-earnings ratio 3. Dividend payout ratio 4. Cash flow per share Formula Sales Inventory of finished goods Sales Fixed assets Sales Total assets Annual credit sales Accounts receivable Accounts receivable Average daily sales Formula Annual dividend per share Current market price per share Current market price per share After-tax earnings per share Annual dividends per share After-tax earnings per share After-tax profits + Depression Number of common shares outstanding What It Shows The effectiveness of the firm in employing inventory The effectiveness of the firm in utilizing plant and equipment The effectiveness of the firm in utilizing total assets How many times the total receivables have been collected during the accounting period The average length of time the firm waits to collect payment after sales What It Shows A measure of return to common stockholders in the form of dividends An indication of market perception of the firm; usually, the faster- growing or less risky firms tend to have higher PE ratios than the slower-growing or more risky firms An indication of dividends paid out as a percentage of profits A measure of total cash per share available for use by the firm Preparing an Effective Case Analysis