Milestone Two Guidelines
For this assignment, due in Module Six, you will submit the Ratio Analysis portion of the final project. For this milestone, you will be analyzing the financial performance of Starbucks using the financial ratios of liquidity, solvency, and profitability (Critical Element III). Include your calculations and amounts in a table in the appendix of your paper. Be sure to show your calculations for each ratio. You will also discuss what each ratio and ratio category tells the user about the financial health of the company, including stating appropriate methods for comparison such as benchmarking and trend analysis.
Note: To calculate the ratio amounts you may use the document Key Financial Ratios Explained and Set Up in Excel. This Excel document may also be used for your final project.
Specifically, the following critical elements must be addressed:
I. Ratio Analysis: Analyze and discuss the financial performance of Starbucks using financial ratios. Include your calculations and amounts in a table in the appendix of your paper. Be sure to show your calculation for each ratio.
A. Liquidity Ratios
1. Accurately present and calculate two liquidity ratios for Starbucks.
2. Discuss what the liquidity ratios reveal about Starbucks, including any description of benchmarks, standard measurements, or other types of analysis used once the ratio amount is known.
B. Solvency Ratios
1. Accurately present and calculate two solvency ratios for Starbucks.
2. Discuss what the solvency ratios reveal about the company, including any description of benchmarks, standard measurements, or other types of analysis used once the ratio amounts are known.
C. Profitability Ratios
1. Accurately present and calculate two profitability ratios for Starbucks.
2. Discuss what the profitability ratios reveal about the company, including any description of benchmarks, standard measurements, or other types of analysis used once the ratio amounts are known.