Trident BUS500 Module 3 Case & SLP Latest 2019 October

BUS500 Financial Intelligence

Module 3 Case

INCOME STATEMENT

Assignment Overview

Use the same annual statements for Starbucks as for the prior module. The Starbucks income statements should be used for the first two questions. Do additional research as necessary for the last question.

IBISWorld is a proprietary database providing industry research. It is accessible via the Trident library. The database is found under additional library resources and offers a lot of interesting industry information including financial information.

Case Assignment

• Locate the income statement for the past two years. Prepare a table in good format comparing at least ten revenue and expense items for the two years. Did the numbers increase or decrease? What can we learn from this information?

• Comment on the changes from one year to another. Is the company doing better or worse? Did revenues and expenses increase or decrease? Are revenues and expenses moving in the same direction?

• How is Starbucks doing vis-à-vis the industry? Use IBISWorld to answer this question.

• Investors emphasize earnings per share. Why is this number so important and what are some of the shortcomings of this number?

Assignment Expectations

Incorporate responses to the questions above in an organized format. Start with an introduction and end with a conclusion/summary. Use headings and subheadings to organize the essay. Do not forget to include references in APA format. Incorporate the required table into the Word document. Do not submit a separate spreadsheet. The suggested length is five to seven pages, including the table.

 

 

 

BUS500 Financial Intelligence

Module 3 SLP

INCOME STATEMENT

We reviewed the balance sheet for VWV in the prior module. This time we are examining the income statement for the same entity.

VWV Company
Income Statement
For the Period Ending December 31, 20XX
Revenues		$540,000
Cost of goods sold		200,000
Gross profit		$340,000
Operating expenses
	Salaries	$100,000
	Lease for office	30,000
	Advertising and promotion	24,000
	Utilities	9,700
	Property taxes	18,000
	Payroll taxes	11,500
	Insurance	8,000
	Depreciation	19,922
	Miscellaneous expenses	9,000
Total operating expenses		$230,122
Operating income		$109,878
Interest income		$250
Interest expense		12,000
Net interest expense		$11,750
Net income		$98,128

 

Use the above income statement to answer the questions below.

1. Is VWV a manufacturer/reseller or a service company?

2. Explain the term cost of goods sold in your own words. Why is this item significant?

3. Does the company have employees?

4. Does the company own some type of property? Can we tell from looking at the income statement alone or do we need to look at the balance sheet too?

5. Are earnings per share important information for VWV Company?

6. How do the dividends affect the income statement?

7. How do we know that VWV Company is using the accrual basis of accounting? Hint: Do not forget to look at the balance sheet from the prior module.

8. Why is the company using the accrual basis of accounting rather the cash basis?

9. Comment on operating income versus net income.

SLP Assignment Expectations

Use Word and respond in a question and answer format. There is no need to use Excel for this particular SLP.