Final Marketing Paper

610 Words Sep 17th, 2014 3 Pages
Ratios Analysis
Janice Simmons
ACC/291
August 27, 2014
Charlene Beamon

Ratios Analysis
Starbucks is the selected organization chosen to discuss ratio calculation findings to explain liquidity, profitability, and solvency ratios reveal about Starbucks financial position. The ratio type that interest users. Data collected and revealed on the performance and position of Starbucks.
This paper will reveal information found on Starbucks balance sheet and income statement following calculations on this organizations liquidity, profitability, and solvency ratios on a period of two years. Good writers introduce their topic without ever using such words as this paper or in this paper. After completing a ratio analysis on Starbucks
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Profit margin is a measure of net income generated by each dollar of sales; computed as divided by net sales (p. 720). Return on assets is a profitability measure that indicates the amount of net income generated by each dollar of assets; calculated as net income divided by average total assets (p. 719). Return on common stockholders’ equity (ROE) is a measure of the dollars of net income earned for each dollar invested by the owners; computed as income available to common stockers divided by average common stockholders’ equity (p.719).

Tools used in Solvency ratios is the measure of ability of a company’s survival over a long period of time, particularly to pay interest as it comes due and to repay the balance of debt at its maturity (p. 704). Debt to assets ratio is a measure of percentage of total financing provided by creditors; computed as total liabilities divided by total assets (p. 717). Times interest earned is a measure of a company’s solvency and ability to meet interest payments as they come due; calculated as income before interest expense and income taxes divided by interest expense (p. 717). Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time to determine the increase (decrease) that has taken place, expressed as either an amount or a percentage (p. 698). Vertical analysis is a technique for evaluating financial

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