Calculate the market-to-book ratio calculate the economic


The following table gives abbreviated balance sheets and income statements for Starbucks. At the end of fiscal 2014, Starbucks had 748 million shares outstanding with a share price of $81.25. The company's weighted-average cost of capital was about 9%. Assume a tax rate of 35%. Balance Sheet End of Year Start of Year 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 taxes (EBIT) 3,224 Interest expense 64 Taxable income 3,160 Tax 1,092 Net income 2,068 Dividends 783 Addition to retained earnings 1,285 (figures in $ millions) a. Calculate the market value added. (Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place.) Market value added $ million b. Calculate the market-to-book ratio. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Market-to-book ratio c. Calculate the economic value added. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Economic value added $ million d. Calculate the return on start-of-the-year capital. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Return on capital %

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Financial Management: Calculate the market-to-book ratio calculate the economic
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