Question

This is Starbuck’s 2019 10-K data. Please make a common size balance sheet and a common size income statement. Thank you!

A B D E F G С 12 Months Ended Sep. 30, 2018 Sep. 29, 2019 Oct. 01, 2017 1 Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions 2 3 Net Revenues: 4 Revenues 5 Cost of sales 6 Store operating expenses 7 Other operating expenses 8 Depreciation and amortization expenses 9 General and administrative expenses 10 Restructuring Charges 11 Total operating expenses 12 Income from equity investees 13 Operating income 14 Gain resulting from acquisition of joint venture 15 Gain (Loss) on Disposition of Business 16 Interest income and other, net 17 Interest expense 18 Earnings before income taxes 19 Income Tax Expense (Benefit) 20 Net earnings including noncontrolling interests 21 Net Income (Loss) Attributable to Noncontrolling Interest $ 26,508.6 8,526.9 10,493.6 371 1,377.3 1,824.1 135.8 22,728.7 298 4,077.9 0 622.8 96.5 (331) 4,466.2 871.6 3,594.6 (4.6) $ 24,719.5 7,930.7 9,472.2 554.9 1,247 1,708.2 224.4 21,137.4 301.2 3,883.3 1,376.4 499.2 191.4 (170.3) 5,780 1,262 4,518 (0.3) $ 22,386.8 7,065.8 8,486.4 518 1,011.4 1,408.4 153.5 18,643.5 391.4 4,134.7 0 93.5 181.8 (92.5) 4,317.5 1,432.6 2,884.9 0.2

Answer 1

a) Common-Size Consolidated Income Statement

12 months ended:	Sep 29, 2019	Sep 30, 2018	Oct 1, 2017
Company-operated stores	81.27%	79.65%	78.84%
Licensed stores	10.85%	10.73%	10.52%
Other	7.88%	9.62%	10.64%
Net revenues	100.00%	100.00%	100.00%
Cost of sales including occupancy costs	-32.17%	-41.16%	-40.37%
Gross profit	67.83%	58.84%	59.63%
Store operating expenses	-39.59%	-29.10%	-29.01%
Other operating expenses	-1.40%	-2.18%	-2.47%
Depreciation and amortization expenses	-5.20%	-5.04%	-4.52%
General and administrative expenses	-6.88%	-7.12%	-6.22%
Restructuring and impairments	-0.51%	-0.91%	-0.69%
Litigation credit	—	—	—
Income from equity investees	1.12%	1.22%	1.75%
Operating income	15.38%	15.71%	18.47%
Gain resulting from acquisition of joint venture	—	5.57%	—
Net gain resulting from divestiture of certain operations	2.35%	2.02%	0.42%
Loss on extinguishment of debt	—	—	—
Interest income and other, net	0.36%	0.77%	0.81%
Interest expense	-1.25%	-0.69%	-0.41%
Earnings before income taxes	16.85%	23.38%	19.29%
Income tax expense	-3.29%	-5.11%	-6.40%
Net earnings including noncontrolling interests	13.56%	18.28%	12.89%
Net (earnings) loss attributable to noncontrolling interests	0.02%	—	—
Net earnings attributable to Starbucks	13.58%	18.28%	12.89%

Starbucks Corp. Common-Size Consolidated Income Statement Sep 29, 2019 81.27% 10.85% 7.88% 100.00% -32.17% 67.83% -39.59% -1.40% -5.20% -6.88% -0.51% Sep 30, 2018 79.65% 10.73% 9.62% 100.00% -41.16% 58.84% -29.10% -2.18% -5.04% -7.12% -0.91% Oct 1, 2017 78.84% 10.52% 10.64% 100.00% -40.37% 59.63% -29.01% -2.47% -4.52% -6.22% -0.69% 12 months ended: Company-operated stores Licensed stores Other Net revenues Cost of sales including occupancy costs Gross profit Store operating expenses Other operating expenses Depreciation and amortization expenses General and administrative expenses Restructuring and impairments Litigation credit Income from equity investees Operating income Gain resulting from acquisition of joint venture Net gain resulting from divestiture of certain operations Loss on extinguishment of debt Interest income and other, net Interest expense Earnings before income taxes Income tax expense Net earnings including noncontrolling interests Net (earnings) loss attributable to noncontrolling interests Net earnings attributable to Starbucks 1.12% 15.38% 1.75% 18.47% 1.22% 15.71% 5.57% 2.02% 2.35% 0.42% 0.36% -1.25% 16.85% -3.29% 13.56% 0.02% 13.58% 0.77% -0.69% 23.38% -5.11% 18.28% 0.81% -0.41% 19.29% -6.40% 12.89% 18.28% 12.89%

b) Common-Size Consolidated Balance Sheet: Assets

	Sep 29, 2019	Sep 30, 2018	Oct 1, 2017
Cash and cash equivalents	13.98%	36.25%	17.14%
Short-term investments	0.37%	0.75%	1.59%
Accounts receivable, net	4.57%	2.87%	6.06%
Inventories	7.96%	5.80%	9.49%
Income tax receivable	0.73%	3.96%	0.47%
Other prepaid expenses and current assets	1.81%	2.10%	2.02%
Prepaid expenses and current assets	2.54%	6.06%	2.49%
Deferred income taxes, net	—	—	—
Current assets	29.42%	51.72%	36.78%
Long-term investments	1.14%	1.11%	3.77%
Equity method investments	1.75%	1.23%	3.01%
Other investments	0.31%	0.16%	0.34%
Equity investments	2.06%	1.39%	3.35%
Property, plant and equipment, net	33.46%	24.54%	34.25%
Deferred income taxes, net	9.19%	0.56%	5.54%
Other long-term assets	2.50%	1.71%	2.53%
Other intangible assets	4.07%	4.31%	3.07%
Goodwill	18.16%	14.66%	10.71%
Long-term assets	70.58%	48.28%	63.22%
Total assets	100.00%	100.00%	100.00%

Starbucks Corp. Common-Size Consolidated Balance Sheet: Assets Sep 29, 2019 13.98% 0.37% 4.57% 7.96% 0.73% 1.81% 2.54% Sep 30, 2018 36.25% 0.75% 2.87% 5.80% 3.96% 2.10% 6.06% Oct 1, 2017 17.14% 1.59% 6.06% 9.49% 0.47% 2.02% 2.49% Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Income tax receivable Other prepaid expenses and current assets Prepaid expenses and current assets Deferred income taxes, net Current assets Long-term investments Equity method investments Other investments Equity investments Property, plant and equipment, net Deferred income taxes, net Other long-term assets Other intangible assets Goodwill Long-term assets Total assets 36.78% 3.77% 3.01% 29.42% 1.14% 1.75% 0.31% 2.06% 33.46% 9.19% 2.50% 4.07% 18.16% 70.58% 100.00% 51.72% 1.11% 1.23% 0.16% 1.39% 24.54% 0.56% 1.71% 4.31% 14.66% 48.28% 100.00% 0.34% 3.35% 34.25% 5.54% 2.53% 3.07% 10.71% 63.22% 100.00%

Common-size Consolidated Balance Sheet: Liabilities and Stockholders’ Equity

	Sep 29, 2019	Sep 30, 2018	Oct 1, 2017
Accounts payable	6.19%	4.88%	5.45%
Accrued occupancy costs	0.92%	0.68%	1.05%
Accrued dividends payable	2.53%	1.84%	2.99%
Accrued capital and other operating expenditures	3.66%	3.09%	4.19%
Self insurance reserves	1.10%	0.88%	1.50%
Accrued business taxes	0.92%	0.76%	1.58%
Accrued liabilities	9.12%	7.25%	11.31%
Accrued payroll and benefits	3.46%	2.72%	3.65%
Income taxes payable	6.72%	0.43%	—
Stored value card liability and current portion of deferred revenue	6.60%	6.80%	8.97%
Current portion of long-term debt	—	1.45%	—
Current liabilities	32.10%	23.53%	29.38%
Long-term debt, excluding current portion	58.10%	37.63%	27.38%
Deferred revenue	35.09%	28.05%	0.03%
Other long-term liabilities	7.13%	5.92%	5.23%
Long-term liabilities	100.32%	71.60%	32.63%
Total liabilities	132.42%	95.13%	62.01%
Common stock; $0.001 par value	0.01%	0.01%	0.01%
Additional paid-in capital	0.21%	0.17%	0.29%
Retained earnings (deficit)	-30.03%	6.03%	38.73%
Accumulated other comprehensive income (loss)	-2.62%	-1.37%	-1.08%
Shareholders’ equity (deficit)	-32.43%	4.84%	37.94%
Noncontrolling interests	0.01%	0.03%	0.05%
Total equity (deficit)	-32.42%	4.87%	37.99%
Total liabilities and equity (deficit)	100.00%	100.00%	100.00%

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