754 Part Nine Financial Planning and Working Capital Management
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End of Year Start of Year
Balance Sheet
Assets
Current assets:
Cash and marketable securities $ 1,844 $ 3,234
Accounts receivable 948 839
Inventories 1,091 1,111
Other current assets 285 288
Total current assets $ 4,169 $ 5,471
Fixed assets:
Net fixed assets $ 3,519 $ 3,201
Other long-term assets 3,064 2,845
Total assets $10,752 $11,517
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 2,244 $ 1,940
Other current liabilities 795 3,438
Total current liabilities $ 3,039 $ 5,378
Long-term debt 2,048 1,299
Other long-term liabilities 394 360
Total liabilities $ 5,481 $ 7,037
Total shareholders’ equity 5,272 4,480
Total liabilities and shareholders’ equity $10,752 $11,517
Income Statement
Net sales $16,448
Cost of goods sold 6,859
Selling, general, and administrative expenses 5,655
Depreciation 710
Earnings before interest and tax (EBIT) $ 3,224
Interest expense 64
Taxable income $ 3,160
Ta x 1,092
Net income $ 2,068
Dividends 783
Addition to retained earnings $ 1,285❱ TABLE 28.10^ Balance sheets and income statement for Starbucks, fiscal 2014 (figures in
$ millions).- Financial ratios True or false?
a. A company’s debt–equity ratio is always less than 1.
b. The quick ratio is always less than the current ratio.
c. The return on equity is always less than the return on assets. - Book rates of return Keller Cosmetics maintains an operating profit margin of 8% and a
sales-to-assets ratio of 3. It has assets of $500,000 and equity of $300,000. Interest payments
are $30,000 and the tax rate is 35%.
a. What is the return on assets?
b. What is the return on equity?