SEC 10-K Project (Starbucks; NASDAQ:SBUX)
My Paper is on Starbucks
•You will write a 2 – 3 page paper, single spaced, one inch margins, 12-pt font, with double space between paragraphs. Your paper should comment on the financial statements for your company as they relate to the information presented in chapters 12 – 17 of your textbook, including the notes to the financial statements. Do not consider information from chapters 18 – 25 in your paper.
•At a minimum, use the following headings to organize your paper: ?Introduction
?Statement of Cash Flows
•You will also be required to include the Income Statement, Balance Sheet and Cash Flow Statement as an attachment to your report under the Exhibits heading (you can cut and paste directly from the 10-K report).
•Avoid academic dishonesty. Write your paper, read it, and edit. Use your own words, and don’t steal from another student or the internet.
•APA style is required for in-text citations and the reference list. Purdue University’s Online Writing Lab has a good website that summarizes APA citations that you can consult.
•Page count does not include title page, tables and exhibits, and reference list.
•Please include a title page.
•Include in-text citations in APA format.
•Take care to comply with the UMUC policy for academic honesty.
•Write your paper, in your own words, using accounting terminology from our textbook and explaining how these relate to the financial statements of your company.
A company’s financial statement ratios really only make sense when compared with benchmarks. It’s not enough to simply say that company XYZ’s current ratio is good because it’s above 1.5. Your analysis will be stronger if you compared your company’s financial statement ratios with industry averages, competitor ratios, and/or prior years.
Don’t be a cheerleader
Don’t fall into the trap of writing your analysis as if you’re an advocate of the company. You have to be objective and impartial in your analysis and not spin the data to be favorable for your company. Let the data be the guide to your conclusions and not the fact that you personally like your company.
Watch for grammar and spelling
There’s an old saying that clear writing demonstrates clear thinking. So be sure to check for spelling and grammatical errors. It’s only human to make typos, so one or two typos in your paper isn’t the end of the world. But you should have so many spelling and grammar errors that your analysis and conclusions arn’t clear.
Use APA formatting
This is self-explanatory and mentioned in the project instructions as well. APA formatting should be used for in-text citations and your references. Here are some good resources for APA formatting:
•APA Style (official site)
•Purdue OWL: APA Formatting and Style Guide
•Citation Machine: Format & Generate Citations – APA, MLA, & Chicago
Don’t use Wikipedia
Don’t use Wikipedia as a source for your paper because it’s not considered an authoritative resource for academic research. This applies not only to our class but to all of your classes at UMUC and other universities, for that matter.
Be careful when interpreting vertical analysis
When interpreting vertical analysis, don’t use language like this if accounts receivable, for example, was 22% of total assets for the current year and 25% for the previous year:
Accounts receivable decreased 3% from the prior year to the current year.
The problem with this statement is that it’s not accurate and describes horizontal analysis instead. The proper way to describe a change in the relative percentage of an account under vertical analysis would be as follows:
Accounts receivable as a percentage of total assets decreased by 3%.
Note the subtle but important difference. Alternatively, you could just state the actual percentages:
In the most recent fiscal year (or just state the actual year), accounts receivable as a percentage of total assets decreased to 22% from 25% in the prior fiscal year (again, you can just state the actual year).
Use page numbers and format numbers correctly
It should go without saying, but you should number the pages of your paper. Just follow the same practices that you learned in English composition classes you’ve had in the past.
Margins, headings, and font size
Per the project instructions, use 1-inch margins on all sides, use headings for each section of your paper and use 12-point font size.
Right align numbers in tables
For numbers in a table, be sure to present them as right-aligned and not centered or left-aligned. If you need an example to follow, just take a look at one of the financial statements in your company’s 10-K. Note that all of the numbers presented in tables are right-aligned. Also remember when you were in grade school and first learned how to add and subtract numbers? Numbers in a column were aligned on the right so that you could line up the digits that needed to be added or subtracted. So just do the same thing that you’ve been doing since grade school.
Make a conclusion/recommendation
Speaking of conclusions, be sure to have one. Would you recommend investing in the company? What is your opinion of their outlook for the future? Be sure your conclusions can be supported with analysis.
Think real money
A big picture question I ask about each project is whether I would feel confident in investing $10,000, for example, in the company based on a student’s analysis. And this is the same way you should approach the project. It helps to pretend as if you are going to invest real money in the company you are researching. In other words, if you were trying to decide whether to invest $10,000 in your company, what information and analysis would you need in order to make an informed decision?
So don’t think of this project as something you’re doing for a class; approach it like there is real money at stake. Do your best to identify real explanations (e.g., new product introduced, decreased demand, entering new markets, etc.) for why the ratios and numbers changed and don’t just describe whether numbers increased or decreased. Anybody can see whether a number has increased or decreased; that part is obvious.