# Submit both a horizontal and vertical analysis of starbucks accounts receivable, fixed assets and debt financing

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submit both a horizontal and vertical analysis of Starbucks' accounts receivable, fixed assets, and debt financing.Access the most current annual report (10-K).

https://www.sec.gov/Archives/edgar/data/829224/000...

QUESTION Submit both a horizontal and vertical analysis of Starbucks' accounts receivable, fixed assets, and debt financing. Please be sure that you access the most current annual report (10-K), LINK GIVEN ABOVE

also here is some helpful information.

Starbuck's presents A/R net of allowance for doubtful accounts - which is the contra asset that reduces A/R to Net Realizable value. This is the reserve for bad debt which is an estimate to accrue for potential bad debt expense on the Income Statement.

A/R is discussed in Starbuck's 10k in Note 1: Summary of Significant Accounting Policies Under the heading "Receivables, net of Allowance for Doubtful Accounts". Since A/R is presented net of the allowance for doubtful, you will have to refer to the footnote disclosure regarding the amount. It states that the 2017 amount was \$9.8 million and the 2016 amount was \$9.4 million.

Net A/R for 2017 is \$870.4M and 2016 is \$768.8M. To get gross A/R (since it is presented net of allowance for doubtful) we will need to add bad the allowance for doubtful figure.

A/R 2017 = \$880.2M gross + (\$9.8M Allowance for doubtful) = \$870.4M Net A/R

A/R 2015 = \$729.8M gross + (\$10.8M Allowance for doubtful) = \$719.0M Net A/R

Remember that the allowance for doubtful reserve is an estimate of expected bad debt and non -collectible A/R. It has increased from 2017 to 2016. Revenues have also increased from 2017 to 2016!

Emilyprofessor
School: Duke University

Attached.

Starbucks Horizontal and Vertical Analysis
Institutional Affiliation
Date

STARBUCKS HORIZONTAL AND VERTICAL ANALYSIS

2

STARBUCKS HORIZONTAL AND VERTICAL ANALYSIS
Similar to ratio analysis, horizontal and vertical analysis is another good way to analyze the trend
in business accounts in the income statement or the balance sheet in percentages. Understanding
horizontal and vertical analysis is important for both internal and external users because it
reveals unexpected differences in the financial statements initiating immediate action to fix
problems if any. Companies generally need h/v analysis to assess their ultimate financial
standing.
Starbucks Company is well known for their delicious coffee drinks spread over 40 countries
across the world since 1971. The business has continued to grow to generate over \$10 billion
annually. Star bucks financial analysis tells us a story about Starbucks that enables comparison
with other business and competitors such as duck in nuts, Below is Starbucks horizontal and
vertical analysis for the years ended October 2, 2017, and September 27, 2016; To be more
specific this paper will review Starbucks accounts receivables, asset acquisition, depreciation,
and amortization, and debt financing. Reviewing these records will help to determine which
direction the company is headed, and make strategic decisions on what opportunities need to be
Vertical analysis
For star bucks, an account of interest is selected and expressed as a percentage. For example, in
this case, accounts receivables are expressed as a percentage of total assets (see appendix) to
show the ratios. This analysis gives the company ahead of how much cost was used to finance

STARBUCKS HORIZONTAL AND VERTICAL ANALYSIS

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investment. The accounting team can isolate the reasons bring such trends to take necessary
action.
Horizontal analysis
The horizontal analysis compares accounts ratios over different periods of time. In this case,
account balances for the selected accounts were compared for the year 2016 and 2017.
Comparing accounts over subsequent years brings out the meaningful trend to implement
decisions such as to increase or decrease investment.
Account Receivables
Accounts receivable is a lega...

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Anonymous
Wow this is really good.... didn't expect it. Sweet!!!!

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