Starbucks Disclosure Analysis Paper

Disclosures are given by a company to provide additional information about the financial statements of the company and provide a better understanding of the information. Management uses these financial disclosures to make sure that the financial information provided is accurate and reported appropriately. Financial disclosures are ways to help investors better understand how the company is doing financially. Starbucks purchases and roast high-quality whole bean coffees that we sell, along with handcrafted coffee and tea beverages and a variety of fresh food items, through company-operated stores. (Starbucks Investor Relations, 2009) Their objective is to maintain Starbucks standing as one of the most recognized and respected brands in the world. This paper will look at the most recent financial statement for Starbucks' and evaluate the statement and its disclosures. We will be analyzing cash and cash equivalents, receivables and inventory and how they are important to investors.

Starbucks consider all highly liquid instruments with a maturity of three months or less at the time of purchase to be cash equivalents. Starbucks maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. We have not experienced any losses related to these balances, and we believe credit risk to be minimal. (Starbucks Investor Relations, 2009)

Starbucks cash and cash equivalents total $1,148.1 million in October 2011 compared to $1,164.0 million in October 2010. Starbucks short-term and long-term investments consist primarily of investment grade debt securities, including some auction rate securities, all of which are classified as available-for-sale. Available-for-sale securities with remaining maturities of less than one year and those identified by management at the time of purchase to be used to fund operations within one year are classified as short term all others will be classified as long term. (Starbucks Investor Relations, 2009) Short-term investments- available for sale securities are $855.0 million in October 2011 compared to $236.5 million in October 2010. Short-term investments- trading securities were $47.6 million in October 2011 compared to the prior year of $49.2 million.

Inventories are stated at the lower of cost or market. Starbucks record inventory reserves for obsolete and slow-moving inventory and for estimated shrinkage between physical inventory counts. As of October 2, 2011, October 3, 2010, and September 27, 2009, inventory reserves were $19.5 million, $18.1 million, and $21.1 million, respectively. (Starbucks Investor Relations, 2009)

Inventories consisted of the following in millions:

Oct 2, 2011 Oct 3, 2010

Coffee:

Unroasted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .