Vertical and horizontal analysis of starbucks
Order Description
You are an analyst for Coffee Connection, a coffee shop located in the Midwest. You have been marginally successful as a company. You are now tasked with analyzing the competition and developing benchmarks for the purpose of both improving profitability and expanding operations. You have identified Starbucks as your most similar competitor. Your job now is to use multiple tools to analyze Starbucks performance and offer well-researched observations concerning the success and challenges faced by Starbucks. You should include an Excel spreadsheet with all calculations
I. Introduction: Provide a concise, professional introduction explaining the purpose of your analysis to your executive.
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 Starbucks accounts receivable balances over time.
2. Use basic financial analysis to examine any vertical changes in Starbucks accounts receivable balances over time.
3. Analyze how Starbucks methods for accounting for receivables and evaluating uncollectible receivables impact the recording process and
presentation of financial statements. In other words, what are this companys 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 Starbucks fixed assets, intangible assets, depreciation, and amortization
over time.
2. Use basic financial analysis to examine any vertical changes in Starbucks fixed assets, intangible assets, depreciation, and amortization
over time.
3. Analyze Starbucks 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 Starbucks short- and long-term debt over time.
2. Use basic financial analysis to examine any vertical changes in Starbucks short- and long-term debt over time.
3. Analyze Starbucks method of debt financing. In your analysis, you should address both current and long-term liabilities, including the
issuance of bonds.
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