ACC 660 Final Project Milestone One: Financial Information and Trend Analysis Prompt: You will present this milestone in th e form of a report.

ACC 660 Final Project Milestone One: Financial Information and Trend Analysis
Prompt: For this assignment, you will place yourself in the role of a controller as you review the Starbucks case study and apply your knowledge and
understanding of accounting principles to resolve issues and formulate recommendations. You will present this milestone in th e form of a report. You will
receive feedback on each milestone, with the expectation that you will make any necessary revisions and then compile the milestones together for your final
project submission.
For Milestone One you will analyze financial statements for Starbucks Corporation for fiscal 2010 through 2012 for financial analysis calcul ation and
interpretation. You will then address linkages between financial results and operating strategy. As part of Critical Element I: Financial Indicators and Trend
Analysis, you will begin by reviewing the financial statements and footnotes that are part of Starbucks’ annual report. Once you complete your review of the
financial statements, you will focus on the gross profit ratio and return on assets and address the tasks in parts B and C of Critical Element I. Finally, you will
perform a horizontal trend analysis to create a pro-forma financial statement.
This assessment addresses the following course outcomes: Analyze financial accounting information from transactions through financial statement preparation for reporting results to i nternal and external users
of information
Interpret financial information in relation to a company’s mission and vision for aligning recommendations to attain strategi c goals Specifically, the following critical elements must be addressed in your milestone submission:
I. Financial Indicators and Trend Analysis
A. Analyze various ratio analyses and compare them to the financial statements and footnotes. Note any similarities or differences.
B. In reviewing the gross profit ratio, 2010 and 2011 were consistent versus a slight decrease in 2012. If management is looking to increase the
gross profit ratio by 4%, what changes would need to be made in the components of gross profit (i.e., how much would sales increase if prices
remained the same?)? Defend your response.
C. Analyze the return on assets (ROA) and discuss the advantages or disadvantages if Starbucks should expand assets by 5% but remain stable with
sales.
D. Perform a horizontal trend analysis on the revenue components of Starbucks’s consolidated statements of earning and develop a pro forma
financial statement for the next year, noting that coffee inventory will increase by 20% and same-store sales will remain flat. Ensure all
information is entered accurately. III. Interpret Financial Information
Based on the case and researching Starbucks corporate philosophy:
a. Summarize how Starbucks meets its mission of “creating a reservoir of trust with their customers, partners, and communities that is deeper than
at any time in their history.” b. What considerations would need to be identified in the financial statements if Starbucks carries out its commitment to hiring veterans and
military spouses? Why?
c. As controller, what are three challenges related to meeting this goal?
d. Starbucks is planning to open 1,500 new stores within the next 10 years. Evaluate the feasibility of opening stores in China, Brazil, and the Czech
Republic.
e. Rate each of the three locations with regard to prior sales history.
Guidelines for Submission: Your paper must be submitted as a 2- to 4-page Microsoft Word document with double spacing, 12-point Times New Roman font,
one-inch margins, and at least three sources cited in APA format.
Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more in formation,
review these instructions.
Critical Element
Case Study 1:
Financial Indicators
and Trend Analysis:
Compare Exemplary
Meets “Proficient” criteria and
is well qualified with concrete
examples (100%) Case Study 1:
Financial Indicators
and Trend Analysis:
Gross Profit Ratio Meets “Proficient” criteria and
defense is well supported and
contextualized (100%) Case Study 1:
Financial Indicators
and Trend Analysis:
Expand Assets Meets “Proficient” criteria and
shows keen insight into the
relationship between expansion
of assets and sales (100%) Case Study 1:
Financial Indicators
and Trend Analysis:
Horizontal Trend
Analysis
Case Study 1:
Interpret Financial
Information: Mission Proficient
Analyzes various ratio analyses
and compares them to the
financial statements and
footnotes, supporting the
comparison with similarities and
differences (90%)
Identifies changes that would
need to be made in the
components of the gross profit
to increase the gross profit ratio
and defends response (90%)
Analyzes the ROA and discusses
the advantages or
disadvantages of expanding
assets by 5% while remaining
stable with sales (90%)
Performs a horizontal trend
analysis and develops a pro
forma financial statement for
the next year (100%) Meets “Proficient” criteria and
summary is exceptionally clear
and contextualized (100%) Summarizes how Starbucks
meets its mission (90%) Needs Improvement
Analyzes various ratio analyses
and compares them to the
financial statements and
footnotes but does not support
the comparison with similarities
and differences (70%)
Identifies changes that would
need to be made in the
components of the gross profit
to increase the gross profit ratio
but does not defend response
(70%)
Analyzes the ROA and discusses
the advantages or
disadvantages of expanding
assets by 5% while remaining
stable with sales but discussion
lacks depth or detail (70%)
Performs a horizontal trend
analysis and develops a pro
forma financial statement for
the next year but contains
inaccuracies (70%)
Summarizes how Starbucks
meets its mission but summary
lacks depth or detail (70%) Not Evident
Does not analyze various ratio
analyses (0%) Value
10 Does not identify changes that
would need to be made in the
components of gross profit to
increase the gross profit ratio
(0%) 5 Does not analyze the ROA (0%) 15 Does not perform a horizontal
trend analysis (0%) 15 Does not summarize how
Starbucks meets its mission
(0%) 5 Case Study 1:
Interpret Financial
Information:
Considerations
Case Study 1:
Interpret Financial
Information:
Challenges
Case Study 1:
Interpret Financial
Information:
Feasibility Meets “Proficient” criteria and
justification is well supported
with concrete examples (100%) Identifies considerations that
would need to be addressed
and justifies response (90%) Identifies considerations that
would need to be addressed but
does not justify response (70%) Does not identify considerations
(0%) 10 Meets “Proficient” criteria and
shows keen insight into
potential challenges a controller
may face (100%)
Meets “Proficient” criteria and
cites scholarly research to
illustrate claims (100%) Identifies three challenges
related to meeting the goal
(90%) Identifies three challenges but
they are not related to meeting
the goal (70%) Does not identify challenges
(0%) 10 Evaluates the feasibility of
opening stores in China, Brazil,
and the Czech Republic (90%) Does not evaluate the feasibility
of opening stores in China,
Brazil, and the Czech Republic
(0%) 15 Case Study 1:
Interpret Financial
Information: Rate Meets “Proficient” criteria and
rankings are well supported and
logical (100%) Rates each of the three
locations with regard to the
prior sales history (90%) Does not rate the three
locations (0%) 5 Articulation of
Response Submission is free of errors
related to citations, grammar,
spelling, syntax, and
organization and is presented in
a professional and easy-to-read
format (100%) Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
(90%) Evaluates the feasibility of
opening stores in China, Brazil,
and the Czech Republic but
evaluation is cursory or lacks
detail (70%)
Rates each of the three
locations but does not take
prior sales history into
consideration (70%)
Submission has major errors
related to citations, grammar,
spelling, syntax, or organization
that negatively impact
readability and articulation of
main ideas (70%) Submission has critical errors
related to citations, grammar,
spelling, syntax, or organization
that prevent understanding of
ideas (0%) 10 Total 100%

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