Problem
Review the current financial statements of Starbucks (2022) and construct two pro forma financial statements. The two financial statements will include an Income Statement and a Balance Sheet.
Part A
Download the last 10-Q from Starbucks into Excel. Use the downloaded data to complete the Income Statement and Balance Sheet. Assume the following:
a) Sales will increase for the next quarter by the same percentage increase from the previous quarter to the last reported quarter.
b) 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.
Part B
Calculate a quarterly variance analysis. Complete the following in your variance analysis:
a) In the Excel template, insert the line items.
b) In Column C, (Q4, 2021) enter the previous quarter's numbers as the budget.
c) In Column D, (Q1, 2022) enter the current quarter's actual numbers.
d) In Column E, the spreadsheet will calculate the dollar difference between the budget and actual numbers.
e) In Column F, calculate the percentage change.
f) In Column G, analyze and speculate the rationale for the variances.