I need help with my SEC 10-K paper. One of the attachments provides the details about the project and the feedback the professor has provided. The other attachment is what I have so far. I need help finishing the paper to my professor’s standards. Any assistance would be greatly appreciated.sec_10_k_starbucks.docsec_10_k_project.docxRunning head: STARBUCKS SEC10-K PROJECT
Starbucks SEC10-K Project
15 February 2016
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STARBUCKS SEC10-K PROJECT
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Starbucks SEC10-K Project
Starbucks is one of the leading eateries in the world. The company has made a name for
itself for the products that they provide for the mass market. The company started as a
coffeehouse, which was among the first one of its kind in the United States. The branch that was
opened thrived as it tapped into an opportunity that was not there before. The initial
entrepreneurs recognized that for majority of Americans they leave their respective homes
without having breakfast. Coffee being a stimulant was a natural option for most of Americans.
Thus, an opportunity to provide coffee in strategic areas that can be accessed by any person at
any time was born. With time more complementary products were introduced to the outlets. The
storeowners discovered that selling pastries, cups and mugs were a potential area that they could
exploit. From year to year the portfolio of Starbucks increased and the financial records also
grew in the same measure. In the books of account the most important document is the cash flow
statement. Through looking at it and understanding what it entails an individual is able to gain a
better view of how a business runs and achieves its profit.
A cash flow statement in financial accounting is a report that demonstrates how the
different changes in the balance sheet account and revenue affect the cash and equivalents of
cash that are used in a company. The statement breaks down the different activities that take
place in a company. The activities are broken down into investing, operating and financing
activities. In Starbucks the activities are the same as well. It is mandatory to understand how the
different activities will impact the cash flow statement. The status of the cash flow statement will
determine the liquidity of Starbucks (Sagner, 2007). Liquidity of a company is extremely
important, as with it there are a number of advantages that a company gets. It is what determines
how much credit Starbucks will be given thanks to how liquid they are. The cash flow statement
gives an indication of how much money at a given time they are able to pay without being
strained or postponing payment.
The cash flow statement is a breakdown of how cash is brought into a business and how
it used and in the process it is pushed out of the business. All transactions that are made have to
be recorded and customers are issued with a receipt as proof of payment. This is the first step
into the statement. It is mandatory that this transaction be noted. It determines how the rest of the
transactions will cost (Kiyosaki, Letcher & Davidson, 2002). In Starbucks payments are made on
a daily basis as an exchange of the goods that are sold. The element in this scenario being cash
into the business is the determinant that of all other elements will look at. Once cash in has been
recorded the statement is valid and the business can use it.
The second element that is recorded in a cash flow statement is operating cost. These are
the costs that a business incurs in order to run it. The cost of operating goes into the costs that are
used up in order to run the daily expenses of the business. In Starbucks it goes towards the raw
materials that are bought and the drivers that bring customers into the establishment. These are
the elements that will ensure that the final cost of the business is realized (Frost, 2008).
The third element that is considered is the cash out. For Starbucks these are the payments
that are made to cater for the expenses that the business incurs. The costs can be varied and at the
same time viewed as constants that drive the business. For instance the coffee making machines
need to be serviced and replaced from time to time so that they are in the best condition to
STARBUCKS SEC10-K PROJECT
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provide customers with the best coffee. The raw materials that are used as ingredients also
constitute to how cash is spent out of the business. Other overheads such as salaries also form
part of cash that is paid out. All the cash paid out depends on the cash that is brought into the
business.
For Starbucks the way the company makes its money is not very different from how other
companies do it. The organization prides itself at ensuring that they offer solutions that are tailor
made to suit their consumers. The initial idea to serve fresh coffee everyday was aimed at
ensuring that their customers get the best services and pay for only a small fee. That was the
starting point. As time progressed and the company was able to learn more about the needs of
their consumers they got more specialized services that suited their clientele. The aim of doing
this is to ensure that they remain at the top as the coffee shop that is the top choice. The fact that
the business became a franchise made it easier for the original owners to make more money. This
is not any different from what other companies have done to improve its cash flow. Most
business have learnt that the customer is always right and the moment one comes up with a
product that suits their need the organization immediately becomes the company of choice of
many customers.
The cash that Starbucks made was reinvested into the business to help it grow and
flourish to become an organization to reckon with. This can be directly seen from the projects
that the organization has involved itself in. From the complimentary and supplementary products
that are offered, it can be seen that Starbucks is dedicated towards ensuring that they grow
themselves to a level that it becomes the top organizations that exist in the world. Some
businesses do not take the same route that Starbucks has taken. The owners make blind decisions
and fail to grow the companies that they have started. As a result the business fails, as it does not
have capital to continue running or funding the projects that it is doing. It should be imperative
that any finance manager of a company educates the owners of the importance of reinvesting any
monies that they make in terms of profit back into the business. This is the best way to ensure
that their business grows. Therefore, the decision that the original owners of Starbucks made was
what made the restaurant what it is today. A force to reckon with across the world as a coffee
shop that is recognized regardless the country that you are in.
Over the years the numbers in the cash flow statement have grown. This is attributed to
careful spending and reinvesting into the business. This is a key learning for any serious
businessman that needs to see himself or herself in a similar position as the owners of the
business. Starbucks is a great example of how best a cash flow statement is used and can help
grow or dispel any issues. It is the simplest form of accounting that basically directs all on what
are expenses, cost of sale and savings. There are very few differences from year to year on the
cash flow statement. The usual trend that is seen is a growth expect in times of a recession that
will have hit the rest of the world let alone America only.
STARBUCKS SEC10-K PROJECT
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References
Sagner, J.S. (2007). Cashflow reengineering: How to optimize the cashflow timeline and improve
financial efficiency. New York: AMACOM, American Management Assocation.
Kiyosaki, R.T., Lechter, S.L., & Davidson, R.M. (2002). The cashflow quadrant. Prince
Fredrick, Md: Recorded Books.
Frost, J. (2008). Cashflow. Glenview, III: Coordinated Capital Resources, 92, 4, 696-749.
STARBUCKS:NASDAQ:SBUX
http://www.sec.gov/Archives/edgar/data/829224/00008292241500
0038/sbux-9272015x10k.htm
You will write a 2 – 3 page paper, single spaced, one inch margins, 12 pt
font, with double space between paragraphs. Your paper should
comment on the financial statements for your company as they relate
to the information presented in chapters 12-17 of your textbook,
including the notes to the financial statements.You should write about
several of the topics covered in these chapters and the weekly SEC
10-K related conference activities, one of which must be either
financial ratio analysis or cash flow statements (DO NOT INCLUDE
BOTH). It is expected that either ratio analysis or cash flow statement
analysis be explored in detail. Use headings in your paper, in APA
format, such as Investments, Dividends, etc. (topics from our textbook;
other examples would be Financial Ratios or Cash Flow). Do not
include topics covered in ACCT 220 (such as Accounts Receivable,
Inventory, Balance Sheet, Income Statement, etc.) Write your paper
as if it was intended for readers without a financial background, so
explain all financial terminology used and concepts presented
Please keep your paper to no more than 3 pages The report will be
submitted after Chapter 17. Do not consider information from Ch 18 – 25 in
your paper.
Take care to avoid academic dishonesty. Write your paper, read it, and
edit. Use your own words – you will be required to use TurnItIn.com
which will indicate similarities to other sources.
Please include a brief introduction of your company as well as a
conclusion/summary at the end.
You will also be required to include the Income Statement, Balance Sheet
and Cash Flow Statement as an attachment to your report (you can cut
and paste directly from the 10-K report).
APA style is required for citations and a reference list.
Additional guidance for your paper and resources:
Page count does not include title page, tables and exhibits, table of
contents, and reference list
Please include a title page (include your name on the title page)
Include a reference list (business classes use APA format)
Include in text citations (business classes use APA format)
Your paper should use one-inch margins on the left, right, top, and bottom
of each page, and font set at 12 point.
Write your paper, in your own words, using accounting words from our
textbook and explaining how these relate to the financial statements of
your company.
Chapter 12-17 cover
Stockholder’s Equity
Dividends
Long-term Liabilities
Investments
Ratio Analysis
Current Ratio
Return on Common Stockholder’s equity
Profit Margin
Return on Assets
Equity Ratio
Statement of Cash Flow
focus on the elements of the cash flow statement and compare each
section. The analysis is not to compare the volume of cash flow. Many
companies that are competitors of each other are very different in size.
Concentrate on how each company is obtaining its cash and how they
are using that cash and note similarities and differences. Compare
year over year numbers and note and research any significant trends
or differences from year to year.
References
https://umuc.equella.ecollege.com/file/0dc3b228-a19d-419a-86c0576ee23c5e15/1/14StockInvestments.pdf
http://principlesofaccounting.com/chapter14/chapter14.html
This is what I have done on the weekly assignments to help with paper
and the professors comments.
Me:
Starbucks is the largest leading specialty coffee in the entire world.
They are ranked 187 on the fortune 500 list for the current year.
The net income for 2014 was over $5 billion. They engage in
roasting and selling of whole bean coffees worldwide. The
company started in 1971, with a single store in Seattle’s Pike Place
Market. Today, they have expanded to over 22,000 retail stores in
67 different countries. Starbucks is named after a character in
Herman Melville’s Moby Dick. The logo is a twin-tailed mermaid,
known as a siren in Greek mythology. The founders chose that
logo to lure in coffee lovers around the world.
References
Starbucks Website (Sep 2015) Retrieved from starbucks.com
website:
http://www.starbucks.com/about-us/company-information
United States Securities and Exchange Commission. (Sep 2014)
Retrieved from sec.gov website:
http://www.sec.gov/Archives/edgar/data/829224/00008292241400
0041/sbux9282014x10k.htm#s6571E5A222BF69F5F8068EA40E001FD
A
Professor:
– definitely one of my favorite companies! I certainly spend a lot of money
there. Your intro is very informative and well written. You may want to add
a few financial facts (revenue volume, revenue growth since they were
founded). Also, please make sure you include in-text citations where
appropriate.
Me:
Dividends
Starbucks future decisions to pay cash dividends continue to be at the
discretion of the Board of Directors. This is dependent on their operating
performance, financial condition, capital expenditure requirements, and
other factors that the Board of Directors considers relevant. During the first
three quarters of fiscal 2013, Starbuck’s paid a cash dividend to
shareholders of $0.21 per share. In the fourth quarter of fiscal 2013 and
each of the first three quarters of fiscal 2014 they declared a cash dividend
of $0.26 per share. The cash dividends paid in
fiscal 2014 and 2013 totaled $783.1 million and $628.9 million. They also
returned $1.6 billion to their shareholders in 2014 through dividends and
share repurchases.
Common Stock
As of November 7, 2014, Starbuck’s had 748.3 million shares , 0.001 par
value, of the registrant’s Common Stock outstanding. During fiscal
years 2014 and 2013, they repurchased 10.5 million and 10.8
million shares of common stock, under share repurchase authorizations.
The number of remaining shares authorized for repurchase
at September 28, 2014 totaled 15.9 million. Stock options to purchase
Starbuck’s common stock are granted at the fair value of the stock on the
grant date. Options granted to non-employee directors generally vest
over one to three years. Nearly all outstanding stock options are nonqualified stock options.
References
United States Securities and Exchange Commission. (Sep 2014) Retrieved
from sec.gov website:
http://www.sec.gov/Archives/edgar/data/829224/000082922414000041/sb
ux-9282014x10k.htm#s6571E5A222BF69F5F8068EA40E001FDA
Professor:
This is a very good start. I like the way you have headers to organize your
paper. Here are some comments and suggestions to help you with the final
product:
I would discuss Common Stock before dividends. I think the report would
flow better that way. In the dividend section, it may be better to discuss the
historical dividends before discussing the future of dividends.
The dividend increase between 2013 to 2014 is fairly significant. It looks
small, but it is actually almost 24% increase. Is this typical for Starbucks?
Why does Starbucks repurchase their stock – is there a specific purpose?
Define your financial terminology – what is a non-qualified stock option, for
example.
Hope this helps!
Me:
One of Starbucks’s top competitors is Dunkin Donuts. Dunkin
Donuts is mainly in the East Coast but is expanding slowly to other
parts of the United States. Starbucks has over 13,000 more stores
than Dunkin Donuts. “Starbucks cash flows from operations
were $3.7 billion in fiscal 2015 compared to $607.8 million in
fiscal 2014. The increase was primarily driven by lapping the prior
year payment of $2.8 billion for the Kraft arbitration matter. The
remaining change of $377 million was primarily due to strong
earnings, partially offset by unfavorable changes in working
capital accounts, mainly due to timing” (Starbucks Corporation,
2015). As for Dunkin Donuts, “Net cash provided by operating
activities of $199.3 million during fiscal year 2014 was driven
primarily by net income of $175.6 million, increased by
depreciation and amortization of $45.5 million, and dividends
received from joint ventures of $7.4 million, offset by $14.6
million of other net non-cash reconciling adjustments, as well
as $14.6 million of changes in operating assets and liabilities”
(Dunkin’ Brands Group, Inc, 2014). It is evident Starbucks is way
above its main competitors when it comes to net sales and net
income. When Dunkin Donuts expands across the United States,
the difference between the two companies will decrease.
References
Dunkin’ Brands Group, Inc (2014). Form 10-K 2014. Retrieved
January 31,2016,
from http://www.sec.gov/Archives/edgar/data/1357204/000135720
415000015/dnkn-20141227x10k.htm
Starbucks Corporation (2015). Form 10-K 2015. Retrieved January
31, 2016,
from http://www.sec.gov/Archives/edgar/data/829224/0000829224
15000038/sbux-9272015x10k.htm
Professor:
Thanks for the info on Dunkin Donuts and Starbucks. It looks like most of
your write-up and analysis related to cash flow consists of direct quotes.
Your paper needs to be original and contain mostly your own words and
analysis based on your review and research of the financial statements.
The only analysis provided net sales and net income and does not appear
related to cash flow. I suggest you revise and first review the actual
statements of both companies and then provide more of an analysis of
each company based on that review. Organize by using topic headers and
concentrate on each section of the cash flow statement, noting similarities,
trends and differences between both companies and year over year. For
example, Starbucks’ cash flow from operating activities dips dramatically in
2014 and then increases again in 2015. It looks like this is largely
attributed to some litigation action. This would be an area that you should
research further and include to provide more info as to how this affected
cash flow. The direct quote from Starbucks provides some info, but does
not explain the terminology used and it would be unclear to many readers
what this means without further explanation. if you would like to revise your
write-up to address the above comments I can provide further feedback to
help you with your paper.

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