Homework: Pro-forma Income Statement
Reviewing the previous quarter's financial statements will provide you with data to construct pro forma financial statements for Starbucks and make some basic projections. This week, you will be charged with constructing two pro forma financial statements and addressing some questions about your projections. The two financial statements will include an Income Statement and Balance Sheet.
To begin your homework, download the Financial Forecasting Template.
Part A
Use Yahoo! Finance or the EDGAR | Company Filings database to download the last 10Q from Starbucks into excel. Use the downloaded data to complete the Income Statement and Balance Sheet on the appropriate tabs in the Financial Forecasting Template. Assume the following:
1. Sales will increase for the next quarter by the same percentage increase from the previous quarter to the last reported quarter. For example, if sales increased 8% from the last quarter to the current reported quarter, you will use 8% as the sales increase for your pro formas.
Calculate the expenses to determine what will change and what will remain the same.
Note: Not all costs are associated with the cost of sales. It will be up to you to determine which line items need to be increased and which ones need to be left alone. This will require you to distinguish between fixed and variable costs. For a reminder of the difference between fixed and variable costs, please watch the video Business Costs (Fixed Costs and Variable Costs) Explained.
Within each line item expense explain your rationale, as well as provide a brief summary.
Part B
Then, calculate a quarterly variance analysis using the Variance Analysis tab of the Financial Forecasting Template (the same template you used for Part A). Complete the following in your variance analysis:
1. In the Excel template, insert the line items.
2. In Column C, (Q4, 20NN) enter the previous quarter's numbers as the budget.
3. In Column D, (Q1, 20NN) enter the current quarter's actual numbers.
4. In Column E, the spreadsheet will calculate the dollar difference between the budget and actual numbers.
5. In Column F, the spreadsheet will calculate the percentage change.
6. In Column G, analyze and speculate the rationale for the variances.
Format your homework according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.
Download:- Financial-Forecasting-Template.rar