1 Starbuck’s Comprehensive Income and Retained Earnings Starbuck’s Comprehensive Income and Retained Earnings The financial report entails reporting of a firm’s financial position within a given period. In this week’s learning we are analyzing Starbucks comprehensive income and the prior periods, Identify the items flowing in the comprehensive income of the company, the relations between the comprehensive income and net income. We’ll also identify the earnings per share of the company for the last three years; find if Starbucks has both basic and diluted EPS and the resultant trend in its comprehensive 2 Starbuck’s Comprehensive Income and Retained Earnings income and earnings per share. Moreover, we shall establish if Starbuck issued dividends or a stock split during the period under review. Starbucks reported a comprehensive income of $2909.90 million in 2016 while in 2015 its comprehensive income was $2534.60 million and $2026 million in 2014.Based on its comprehensive income for the last three consecutive years, there has been an upward rise in its income with a change of 14.80% during 2016-2015 and 24.60% during the period between 2015-2014.This is a great improvement for Starbucks and it’s a clear indication that Starbucks has a sound financial position. The items that flow in its comprehensive income are the unrealized holding gains (losses) on available for sale securities, unrealized gains on cash flow hedging instruments, unrealized gains on net investments hedging instruments and the translation adjustments. The net income for the period ending 2016 was $2818.9 million, whereas in 2015 the reported net income was $ 2759.3 and $ 20167.7 million in 2014. The comparison between the comprehensive income and the net income is that the first is higher than the later since there are additional incomes received by Starbucks but has not yet been earned, for instance, all the net unrealized gains from available for sale securities, cash flow hedging instruments and the net investment hedging instruments. Starbucks has both the basic and diluted earnings per share. The basic EPS for the three consecutive financial years was $1.91, $1.84 and $1.37 respectively while the diluted earnings per share were $1.90 for 2016, $1.82 for the period ending 2015 and lastly $135 in 2014. Starbuck’s comprehensive income has been on an upward trend since 2014 to 2016, this has been the same case with its earnings per share. The high earnings per share as reported in the books of Starbucks shows that the business generates a significant dividend to its investors or has enough funds to invest back to the business for expansion of its operations 3 Starbuck’s Comprehensive Income and Retained Earnings Starbucks has been paying cash dividends to its shareholders for the three years under our review, from the Company’s cash flow statement, Starbuck spent $1178 million to pay the dividends in 2016, $928.6 million in 2015 and $ 783.1 million in 2014, there has been a significant increase in the dividend payout ratio which implies the liquidity position of the company is sound. In 2015, a two-forone stock split was effective on the company’s $0.001 par value common stock. My evaluation from inception for the Company is still unchanged because Starbucks has portrayed all the parameters of a sound business and I will advise any potential investors to invest in the company. References https://investor.starbucks.com/financial-data/annual-reports/default.aspx STARBUCKS CORPORATION 1 Starbucks Corporation- Initial 10K Analysis Starbucks Corporation is a roaster, marketer and retailer of specialty coffee. Its main mission is ‘to inspire and nurture the human spirit- one person, one cup and one neighborhood served at a time’. Through the company’s retail stores, Starbucks purchases, roasts ad sells high quality packaged coffees that come along with freshly brewed coffees, teas and other beverages with an additional variety of fresh food items. In addition, the company is focused on selection of beverage making equipment and its accessories. It also sells a variety of coffee and tea products through their chain of stores which include grocery stores, convenience stores and national food service accounts. Starbucks reports in financial statements under the U.S GAAP further, the company is registered and traded under NASDAQ. Starbucks Corporation (NASDAQ; SBUX) recently reported its 13 week fiscal third week and a 39 week fiscal year to the date ended July 2, 2017 STARBUCKS CORPORATION 2 (News, Ideas, Outlook, Strategy & Funds, 2017). Fiscal reports on the 2017 and 2016 results included items that were excluded from the GAAP results. As part of their mission, Starbucks is committed to maintaining uncompromising principles as they grow, due to this, the board of directors ensures they exercise corporate governance in the company. This is done in compliance with the auditor’s compliance and the expected reporting standard by the board of directors. Thus they have an independent auditing body that ensures they give a true and fair view of the company. Its Independent auditors are Delloitte and Touchee LLP. These auditing companies ensure they give a true and fair view of the company ("Company Information", 2017). In the form 10-K of Starbucks corporation, the following are a list of financial statements that are included. • Consolidated earnings for the fiscal year ended July 2, 2017, October 2, 2016 and September 2, 2015. • Consolidated statements of comprehensive income for the fiscal year ended July 2, 2017, October 2, 2016 and September 2, 2015. • Consolidated balance sheet of the fiscal year ended July 2, 2017 and October 2, 2016. • Consolidated statement of cash flows for the fiscal year for the fiscal year ended July 2, 2017, October 2, 2016 and September 2, 2015. • Consolidated statements of equity for the fiscal year ended July 2, 2017, October 27, 2016 and September 2, 2015. STARBUCKS CORPORATION • Notes to consolidated financial statements and • Reports of the independent registered public accounting firm. 3 The financial statement schedules in the form are omitted. This is so because they are not applicable in the consolidated financial statements or any notes described in the form under section 15(a)(1) of the requirement. Bases on the initial assessment, the consolidated revenues were $ 5.7 billion in the financial year of 2017. This was an increase of 8% compared to the previous financial year of 2016. However, the increase was driven by the increased number of stores that generate more revenue from the opening of the 2,341 net new stores over the last 12 months and a growth of 4% comparable sales. STARBUCKS CORPORATION 4 References Company Information. (2017). Starbucks Coffee Company. Retrieved 4 September 2017, from https://www.starbucks.com/about-us/company-information News, M., Ideas, S., Outlook, M., Strategy, I., & Funds, E. (2017). Starbucks Corporation 10-K Nov 18 2016. Seeking Alpha. Retrieved 4 September 2017, from https://seekingalpha.com/filing/3298320#SBUX1022016X10XK_HTM_S8E8E28B75B64C1ACD14D3265888F6D34 1 Starbuck’s Comprehensive Income and Retained Earnings Starbuck’s Comprehensive Income and Retained Earnings The financial report entails reporting of a firm’s financial position within a given period. In this week’s learning we are analyzing Starbucks comprehensive income and the prior periods, Identify the items flowing in the comprehensive income of the company, the relations between the comprehensive income and net income. We’ll also identify the earnings per share of the company for the last three years; find if Starbucks has both basic and diluted EPS and the resultant trend in its comprehensive 2 Starbuck’s Comprehensive Income and Retained Earnings income and earnings per share. Moreover, we shall establish if Starbuck issued dividends or a stock split during the period under review. Starbucks reported a comprehensive income of $2909.90 million in 2016 while in 2015 its comprehensive income was $2534.60 million and $2026 million in 2014.Based on its comprehensive income for the last three consecutive years, there has been an upward rise in its income with a change of 14.80% during 2016-2015 and 24.60% during the period between 2015-2014.This is a great improvement for Starbucks and it’s a clear indication that Starbucks has a sound financial position. The items that flow in its comprehensive income are the unrealized holding gains (losses) on available for sale securities, unrealized gains on cash flow hedging instruments, unrealized gains on net investments hedging instruments and the translation adjustments. The net income for the period ending 2016 was $2818.9 million, whereas in 2015 the reported net income was $ 2759.3 and $ 20167.7 million in 2014. The comparison between the comprehensive income and the net income is that the first is higher than the later since there are additional incomes received by Starbucks but has not yet been earned, for instance, all the net unrealized gains from available for sale securities, cash flow hedging instruments and the net investment hedging instruments. Starbucks has both the basic and diluted earnings per share. The basic EPS for the three consecutive financial years was $1.91, $1.84 and $1.37 respectively while the diluted earnings per share were $1.90 for 2016, $1.82 for the period ending 2015 and lastly $135 in 2014. Starbuck’s comprehensive income has been on an upward trend since 2014 to 2016, this has been the same case with its earnings per share. The high earnings per share as reported in the books of Starbucks shows that the business generates a significant dividend to its investors or has enough funds to invest back to the business for expansion of its operations 3 Starbuck’s Comprehensive Income and Retained Earnings Starbucks has been paying cash dividends to its shareholders for the three years under our review, from the Company’s cash flow statement, Starbuck spent $1178 million to pay the dividends in 2016, $928.6 million in 2015 and $ 783.1 million in 2014, there has been a significant increase in the dividend payout ratio which implies the liquidity position of the company is sound. In 2015, a two-forone stock split was effective on the company’s $0.001 par value common stock. My evaluation from inception for the Company is still unchanged because Starbucks has portrayed all the parameters of a sound business and I will advise any potential investors to invest in the company. References https://investor.starbucks.com/financial-data/annual-reports/default.aspx
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