MGMT S 2600 Midterm Exam Study Guide FINAL
HARVARD UNIVERSITY EXTENSION SCHOOL
MGMT S-2600: FINANCIAL STATEMENT ANALYSIS
STUDY GUIDE FOR MIDTERM EXAM
1). On October 2, 2011, Starbucks Corporation reported, on its Form 10-K, the following (in millions): Total expenses
Operating income
Net earnings
2011
$10,452.4
1,728.5
1,248.0
2010
$9,759.1
1,419.4
948.3
What amount of revenues did Starbucks report for the year ending October 2, 2011?
A) $10,452.4
B) $ 8,723.9
C) $11,700.4
D) $12,180.9
E) None of the above
Answer: C
Rationale: Revenues – Total expenses = Net earnings. Revenues – $10,452.4 = $1,248.0.
Therefore, Revenues were $11,700.4
2). On October 2, 2011, Starbucks Corporation reported, on its Form 10-K, the following (in millions): Operating income
Net earnings
2011
$ 1,728.5
$ 1,248.0
2010
$1,419.4
$ 948.3
Calculate year-over-year increase in Net earnings, in percentage terms.
A) 22%
B) 32%
C) 72%
D) 67%
E) None of the above
Answer: B
Rationale: During the year, Net earnings increased compared to the prior year. This increase is calculated as ($1,248.0 – $948.3) / $948.3 = 32%.
HARVARD UNIVERSITY EXTENSION SCHOOL
MGMT S-2600: FINANCIAL STATEMENT ANALYSIS
STUDY GUIDE FOR MIDTERM EXAM
3). The Goodyear Tire & Rubber Company’s December 31, 2011, financial statements reported the following (in millions).
Cash December 31, 2011
Cash from operating activities
Cash from investing activities
Cash from financing activities
$ 2,772
773
(902)
896
What did Goodyear report for Cash on its December 31, 2010 balance sheet?
A) $2,772 million
B) $3,539 million
C) $767 million
D) $2,005 million
E) None of the above
Answer: D
Rationale: Cash, beginning of year + Cash from operating activities + Cash from investing activities + Cash from financing activities = Cash at end of year
Cash, beginning of year + $773 – $902 + $896 = $2,772. Cash, beginning of year = $2,005
4). Sales for the year = $108,229, Net Income for the year= $13,144, Income from equity investments
= $3,309, and average Equity during the year
MGMT S-2600: FINANCIAL STATEMENT ANALYSIS
STUDY GUIDE FOR MIDTERM EXAM
1). On October 2, 2011, Starbucks Corporation reported, on its Form 10-K, the following (in millions): Total expenses
Operating income
Net earnings
2011
$10,452.4
1,728.5
1,248.0
2010
$9,759.1
1,419.4
948.3
What amount of revenues did Starbucks report for the year ending October 2, 2011?
A) $10,452.4
B) $ 8,723.9
C) $11,700.4
D) $12,180.9
E) None of the above
Answer: C
Rationale: Revenues – Total expenses = Net earnings. Revenues – $10,452.4 = $1,248.0.
Therefore, Revenues were $11,700.4
2). On October 2, 2011, Starbucks Corporation reported, on its Form 10-K, the following (in millions): Operating income
Net earnings
2011
$ 1,728.5
$ 1,248.0
2010
$1,419.4
$ 948.3
Calculate year-over-year increase in Net earnings, in percentage terms.
A) 22%
B) 32%
C) 72%
D) 67%
E) None of the above
Answer: B
Rationale: During the year, Net earnings increased compared to the prior year. This increase is calculated as ($1,248.0 – $948.3) / $948.3 = 32%.
HARVARD UNIVERSITY EXTENSION SCHOOL
MGMT S-2600: FINANCIAL STATEMENT ANALYSIS
STUDY GUIDE FOR MIDTERM EXAM
3). The Goodyear Tire & Rubber Company’s December 31, 2011, financial statements reported the following (in millions).
Cash December 31, 2011
Cash from operating activities
Cash from investing activities
Cash from financing activities
$ 2,772
773
(902)
896
What did Goodyear report for Cash on its December 31, 2010 balance sheet?
A) $2,772 million
B) $3,539 million
C) $767 million
D) $2,005 million
E) None of the above
Answer: D
Rationale: Cash, beginning of year + Cash from operating activities + Cash from investing activities + Cash from financing activities = Cash at end of year
Cash, beginning of year + $773 – $902 + $896 = $2,772. Cash, beginning of year = $2,005
4). Sales for the year = $108,229, Net Income for the year= $13,144, Income from equity investments
= $3,309, and average Equity during the year