Module 2 – Background
Required Background Material
The emphasis is on the balance sheet, but we need to understand how the four financial statements are connected. Let us start with two brief videos describing financial statements.
AccountingWITT. (2011, Oct. 1). Financial Statements – An Introduction. [Video file]. Retrieved from https://www.youtube.com/watch?v=dqOCRIcapoI&list=PLBvbcPpX_6wSF3UQwLxdRNJeK4cSGWkx8&index=21
AccountingWITT. (2011, Oct. 20). Financial Statements – Interconnectivity. [Video file]. Retrieved from https://www.youtube.com/watch?v=9OX3Cnd35LE&index=26&list=PLBvbcPpX_6wSF3UQwLxdRNJeK4cSGWkx8
Next, view the video below and read a succinct explanation for an introduction to the balance sheet.
The Motley Fool. (n.d.). Balance Sheet. Retrieved from http://wiki.fool.com/Balance_sheet
Cliqvid. (2013, Feb.13). What is a Balance Sheet? [Video File]. Retrieved from https://www.youtube.com/watch?v=ixCPM5HznRU
It is now time for a somewhat more comprehensive overview of a balance sheet. At this time it is sufficient to review the section on the balance sheet.
Baruch College’s Guide to Financial Statements. [Interactive Presentation]. (2008). Retrieved from http://www.baruch.cuny.edu/tutorials/statements/view_tutorial.html
The Securities and Exchange Commission (SEC) also has an excellent guide to financial statements on its website.
SEC. Beginners’ Guide to Financial Statements. (n.d.) Retrieved from http://www.sec.gov/investor/pubs/begfinstmtguide.htm
Accounting Coach. (n.d.). Dictionary of Accounting Terms. Retrieved from http://www.accountingcoach.com/terms
Walther, L. M. (2015). Principles of accounting: A complete online text. Retrieved from http://www.principlesofaccounting.com/ . Note that there are also many useful videos associated with Dr. Walther’s textbook.
Module 2 – Case
The main purpose of this module is to review the balance sheet in more detail. Go to http://www.starbucks.com and click on the investor relations link. Locate the annual reports for the past two years. Review Starbucks’ financial report, review background material, and do additional research as needed to write an essay where you incorporate answers to the questions below.
- Provide a brief introduction to the company and include a link to the company’s website.
- Distinguish between an expense (expired cost) and an asset.
- Distinguish between current and long-term assets.
- Distinguish between current and long-term liabilities.
- Review Starbuck’s balance sheet and provide two examples of each of the above categories.
- Discuss retained earnings and how income or loss and dividends affect this account. Review Starbucks’s retained earnings account and explain how it changed during the past two years.
- How much debt does Starbucks have? Is the amount of debt high? How do we know if it is considered high?
- What is the difference between an annual report and a 10-k?
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. The suggested length is five to seven pages.
Rubric Name: MBA/MSHRM/MSL Case Grading Rubric for Quantitative Business Courses -Timeliness v1