Demonstrating the ability to connect and critic at least one store level risk to the financial statements is the core of this deliverable. This rubric assesses how well the student is able identify at least one risk that the company faces at the store level and demonstrate an understanding of the trend of the risk over the years and how management gives importance to it, again, comparing it to the financial statement analysis.
1. Of the risks that you identify at the store level, which one do you think could most adversely affect the income statement, balance sheet, and cash flow statement and conducting a what-if analysis, give an example with hypothetical figures how the risk could adversely affect the financial statements? Support your assertion by showing the effects in a what-if analysis.
3. Demonstrate your understanding of theft of inventory on the gross profit margin and how that is connected at the Store and Firm Level to the financial statements. Support your answer with calculations.
4. Demonstrate your understanding of theft of inventory on the Cost of Sales and how many items that Starbucks would have to sell to make up the losses? Support your answer with calculations.
5. Demonstrate your understanding of the difference between cost flows and physical flows of inventory.
6. Identify and analyze at least one piece of equipment used in Starbucks and discuss its depreciation accounting effects by comparing straight-line v. double declining balance methods on the financial statements. Support your answer with calculations.