Disclosure Analysis Paper

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Disclosure Analysis Paper

August 30, 2010

Disclosure Analysis Paper

Analyzing the disclosures contained in a company’s financial statement is important to understanding the heath of the company. Starbucks is the corporation that I will be analyzing. Understanding cash and cash equivalents, receivables, and inventories is important for investors.

Starbucks purchases and roasts high-quality whole bean coffees and sells them, along with fresh, rich brewed coffees through company operated retail stores. [ (Starbucks Investor Relations, 2009) ] Starbucks first opened in 1971 which was in Seattle. Starbucks mission is to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time [ (Starbucks Investor Relations, 2009) ]. Today there are more than 15,000 stores in 50 countries.

Defining the current assets of a company is the first step in understanding how the health of a company is. The three categories that will be analyzing for Starbucks are Cash and cash equivalent, receivables and inventories.

The company considers all highly liquid instruments with a maturity of three months or less at the time of purchase to be cash equivalents. The company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. The company has not experienced any losses related to these balances, and management believes its credit risk to be minimal [ (Starbucks Investor Relations, 2009) ].

Cash and cash equivalents total $599.8 million in September 2009 compared to $269.8 million in September 2008. Short-term investments – available for sale securities include Corporate debt securities totaling $2.5 million and Government treasury securities totaling $19 million in September 2009. Short-term investments- trading securities total $44.8 million. For total of $66.3 million in September 2009. Short-term investments – available for sale...
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