This case uses both the income statement (consolidated statement of earnings) and the balance sheet of Starbucks Corporation. Visit http://www.pearsonhighered.com/ Horngren to view a link to the Starbucks Corporation Fiscal 2013 Annual Report.
1. What was the value of the company’s inventory at September 29, 2013, and September 30, 2012?
2. Review Note 5 (specifically Inventories) in the Notes to Consolidated Financial Statements. What do Starbucks’ inventories consist of?
3. What was the amount of Starbucks’s cost of goods sold (cost of sales) for the year ending September 29, 2013, and the year ending September 30, 2012?
4. What income statement format does Starbucks use? Explain.
5. Compute Starbucks’s gross profit percentage for the year ending September 29, 2013, and the year ending September 30, 2012. Did the gross profit percentage improve, worsen, or hold steady? Assuming the industry average for gross profit percentage is 58.58%, how does Starbucks compare in the industry?