? Equity Investments and Notes to the Financial Statements

I have attached all four teammates papers, please do the following:Summarize in no more than 350 words any equity investments that the companies have.Describe any footnotes to the financial statements that were different from company to company.Format your paper consistent with APA standards.
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Glacier Bancorp, Inc.
Equity Investment Analysis & Analysis on Notes to the Financial Statements
From what the 10-K form shows, Glacier Bancorp mainly invests in other entities
through acquisitions. They currently have 13 bank divisions, treasury and an information
technology department. Among the 13 bank divisions is the latest acquisitions of Treasure State
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Glacier Bancorp, Inc.
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Bank of Missoula, MT. They also have ?VIE? (variable interest entities) subsidiaries they have
significant control over. They invest much of the excess assets mainly into government securities
bot available-for-sale and held-to-maturity. They also have equity investments in Certified
Development Entities ? of which the tax credits are spread out over 7 years; and, Low Income
Housing Credits ? with the credits taken out over a 10-year period. All investment costs, gains
and/or losses are transparent in the financial statements and pertinent information is discussed in
the notes following the statements. From what is shown in the statements all acquisitions and
investments are consolidated along with all the divisions of the corporation. In the notes they
portray what the acquisitions brought to the table, so the reader can see the reason for the
purchase. They have listed on page 25 the amounts for the most recent acquisitions for ?total
assets, investment securities, loans receivable, non-interest and interest-bearing deposits and
Federal Home Loan Bank Advances and securities sold under agreements to repurchase? which
makes it simple for the reader to compare to the bank?s numbers. By comparing these with those
reported by Glacier Bancorp, you can see they are not a substantial amount.
Glacier Bancorp have several different disclosure notes compared to companies in other
industries. They discuss credit risks for themselves as well as the consumers they serve when it
comes to residential and commercial loans. They discuss FASB requirements, as well as SEC
and other Federal regulations that may affect the sustainability, marketability, etc. on the
corporation?s daily operations and success. They discuss how the many laws governing them,
such as the Dodd-Frank Act, the Community Redevelopment, and several state laws governing
?limitations and restrictions relating to indemnification of directors, distributions to shareholders,
transactions involving directors, officers or interested shareholders, maintenance of books,
records and minutes, and observance of certain corporate formalities? (pg. 7). They also discuss
Glacier Bancorp, Inc.
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when there is a change in directors as happened in the beginning of this year. They gave a
background on the new CEO and pointed out the time in succession he had before taking over
the position. This was helpful to see who he had worked for, so the reader could look at their
financial statements, showing the choice was a good one.
I am not sure what other disclosures they could add to their financial statement notes as I
don?t have much experience in reading them. Seems to me they cover their basis well with what
they have. They even cover the risks associated with forward looking financial forecasts. I think
this company really tries to cover all angles when it comes to portraying the financial health and
risks to all the shareholders. In my little opinion, they seem to be making the right decisions in
aiming for and achieving their objectives.
References:
Glacier Bancorp, Inc.
Glacier Bancorp, Inc.. (2017). Retrieved from
http://www.snl.com/IRWebLinkX/docs.aspx?iid=1023792
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Running head: EQUITY INVESTMENT ANALYSIS AND ANALYSIS ON
NOTES TO
Equity Investment Analysis and Analysis on Notes to the Financial Statements
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EQUITY INVESTMENT ANALYSIS AND ANALYSIS ON NOTES TO
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Equity Investment Analysis and Analysis on Notes to the Financial Statements
In the notes section of Starbuck 2016 annual 10-K report, the investing activities section
the first line represents cash Starbucks used to purchase investments in other entities. As of
October 2, 2016, we had a 50% ownership interest in each of the following international equity
method investees: President Starbucks Coffee (Shanghai); Starbucks Coffee Korea Co., Ltd.;
President Starbucks Coffee Corporation (Taiwan) Company Limited; and Tata Starbucks
Limited (India). These international entities operate licensed Starbucks® retail stores. We also
license the rights to produce and distribute Starbucks-branded products to our 50% owned joint
venture, The North American Coffee Partnership with the Pepsi-Cola Company, which develops
and distributes bottled Starbucks® beverages, including Frappuccino® coffee drinks, Starbucks
Doubleshot® espresso drinks, Starbucks Refreshers® beverages, and Starbucks® Iced Espresso
Classics, (Starbucks, 2017).
Starbucks uses both the equity and cost method of accounting for their investments.
Equity investments are accounted for using the equity method of accounting if the investment
gives Starbucks the ability to exercise significant influence, but not control, over an investee.
Equity investments for which Starbucks does not have the ability to exercise significant
influence are accounted for using the cost method of accounting and are recorded in long-term
investments on the consolidated balance sheets, (Stock Analysis on Net, 2017).
The investments that Starbucks makes are imperative to their bottom line and there is an
impact on the balance sheet because of them. Our share of income and losses from our equity
method investments is included in income from equity investees on our consolidated statements
of earnings. Revenues generated from these related parties were $164.2 million, $153.4 million,
and $219.2 million in fiscal years 2016, 2015 and 2014, respectively, (Starbucks, 2017).
EQUITY INVESTMENT ANALYSIS AND ANALYSIS ON NOTES TO
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Some of the other items listed in the notes section of the 10-K report are debt (both shortand long-term), revolving credit, equity, stock options, taxes, and commitments and
contingencies. All of these items help to establish a good financial picture of Starbucks and how
their different investments and entities help to form the company and help to establish their cash
flow overall. The note that was most significant overall in the 10-K form was the section about
legal proceedings. Starbucks entered into an arbitration agreement with Kraft Foods that
impacted their bottom line because they were ordered to pay over $2 million dollars to Kraft
Foods.
There are no additional disclosures that were needed on the report. Because Starbucks is
such a large corporation and has to follow such strict guidelines according to the SEC, they must
disclose all aspects of the company when it comes to financial information. Because of that,
there is a significant amount of data that can be used to understand the financial future of the
company. The analysis from Week 4 still stands because the more information that is gathered
about Starbucks, the more the amount of debt is worrisome. Because so much money is being
spent on these items, the company may have to stop spending so much capital to do this.
Starbucks is still in good financial shape overall, but with the amount of capital being spent, the
company could easily have issues in later fiscal years.
EQUITY INVESTMENT ANALYSIS AND ANALYSIS ON NOTES TO
References
Starbucks. (2017). Starbucks FY-16 Annual Report on Form 10-K. Retrieved from
https://s21.q4cdn.com/369030626/files/doc_financials/2016/Annual/FY16-AnnualReport-on-Form-10-K.pdf
Stock Analysis on Net. (2017). Starbucks Corp. (SBUX) | Investments. Retrieved from
https://www.stock-analysis-on.net/NASDAQ/Company/StarbucksCorp/Analysis/Investments
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Running head: WEEK 5 – 10-K
1
Week 5 – 10-K
WEEK 5 – 10-K
2
Week 5 – 10-K
Understanding the importance of a company?s financial statements is detrimental to
understanding the financial health of a company. The week?s assignment of Best Buy?s 10-K
report required us to evaluate the company and their subsidiaries. Best Buy?s financial notes
define who their subsidiaries are, how they are accounted for, and which financial statements
subsidiary information can be found. Best Buy Corporation, Inc., clearly states their financial
notes in their annual report just below their financial statements. This makes understanding
additional information easy to read and follow due to the information being listed closely
together.
In the beginning of the financial note section, Best Buy states that the terms ?Best Buy?,
?we?, ?us?, and ?our? refers to Best Buy and their consolidated subsidiaries. Some of their
subsidiaries are Geek Squad, Magnolia Home Theater, and Pacific Kitchen and Home (Best Buy
2017 Annual Report, 2017). The financial statement notes also explains the acquisition of
Canadian companies and the conformation of those stores to Best Buy stores. ?In 2017, Best Buy
acquired 131 Future Shops (Canadian Brand), of which 65 of these stores were closed and 66 of
them were converted to the Best Buy franchise? (Best Buy 2017 Annual Report, 2017). This
transaction of acquiring additional stores was accounted for under the consolidation method.
Accounting transactions for their subsidiaries, such as restructuring charges and cost of goods
sold, are represented in the Consolidated Statements of Earnings.
The notes Best Buy Corporation has listed in their financial statements are vitally
important for the readers of them. The financial statements illustrate the specific numbers of the
company?s health, while the notes explain where the numbers came from and how they were
determined. For example, one specific note found their annual report was the section based on
WEEK 5 – 10-K
3
restructuring charges. These expenses are explained to be necessary to simplify the company?s
business objectives, that in return, should generate additional revenue in the future. It is
important to mention this information because readers can also review the section pertaining to
?discontinued operations?. This information explains the subsidiaries that Best Buy eliminated in
2017 due to poor performance.
Although Best Buy Corporation, Inc., does an efficient job at listing valuable information
within their annual report, there is additional information I would like to see. One of the most
important aspects that I would like to know is the financial health of the subsidiaries when they
were acquired, and throughout the year. Best Buy is obligated to report subsidiary information,
but this information may be included in the parent company?s financial reports. As a reader, it
would be useful to see the financial health of the subsidiaries independently. My outlook on Best
Buy?s financial health has not changed from the previous assignments. I think they have
demonstrated a stable financial setting and their notes emphasize their position.
WEEK 5 – 10-K
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Reference
Best Buy 2017 Annual Report. (2017). BestBuy.com. Retrieved from
http://s2.q4cdn.com/785564492/files/doc_financials/2017/annual/BestBuy-2017AnnualReport.pdf
Running head: EQUITY INVESTMENT ANALYSIS AND ANALYSIS ON
NOTES TO THE FINANCIAL STATEMENTS
Equity Investment Analysis and Analysis on Notes to the Financial Statements: Apple Inc.
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EQUITY INVESTMENT ANALYSIS AND ANALYSIS ON NOTES TO THE
FINANCIAL STATEMENTS
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Introduction
This week?s analysis is focused on the equity investments and notes to the financial
statements of Apple Inc. The analysis will be based on the identification of the activities that
may have taken place during the financial period based on investment terms as well as the type
of method that the company has been used to account for these investments.
Locate the notes to the financial statements
In locating the notes to the financial statements, there are 12 notes to the financial
statements and they are as follow: note 1) summary of significant accounting policies, 2)
financial statements, 3) consolidated financial statement details, 4) acquired intangible assets, 5)
income taxes, 6) taxes, 7) shareholder?s equity, 8) comprehensive income, 9) benefit plans, 10)
commitment and contingencies, 11) segment information and geographic data, 12) selected
quarterly (unaudited).
Did you identify any investments in other entities?
There was no identification of the company being invested in other entities or specified
on the notes to the consolidated financial statements but apparently, the company has been
invested in internal capacity and strategic relationships with other vendors. ?The Company has
invested in internal capacity and strategic relationships with outside manufacturing vendors and
continues to make investments in capital equipment as needed to meet anticipated demand for its
products?. With that being said, the company is a wholly owned company 100% even though it
has some intercompany transactions with its subsidiaries. The company fully owned these
subsidiaries.
EQUITY INVESTMENT ANALYSIS AND ANALYSIS ON NOTES TO THE
FINANCIAL STATEMENTS
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If so, are they accounted for under the cost method, the equity method, or
consolidation?
There is no realization of any investments in other entities where there is a certain
percentage of ownership. Even though the company has been invested in internal capacity and
strategic relationships with outside vendors, there is no exhibition of ownership that would
involve the type of acquisition method as relevant.
Are they significant to the overall entity’s financial statements?
With Apple Inc. being an investor in internal capacity and strategic relationship with the
outside manufacturing vendors, I personally think that the company is in a great engagement as
far as knowing and understanding the immediate support that the company would need to back
up its products in time of needs
Identify which additional notes the company has in their Form 10-K.
There are no additional notes have been identified in the company?s notes to the
consolidated financial statements.
In addition to the notes that you analyzed related to fixed assets, goodwill, and debt,
what other notes did you find significant in your analysis of the company?
I would say that the summary of significant accounting policies is one of the important
notes in addition to the notes for the fixed assets, goodwill, and debt. While there are other
significant notes I believe that the significant accounting policies can be the foundation of
controlling and accounting for the day to day transactions of the business. Accounting policies
such as the revenue recognition is significant in measuring and recording revenue to the
appropriate accounting period.
EQUITY INVESTMENT ANALYSIS AND ANALYSIS ON NOTES TO THE
FINANCIAL STATEMENTS
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What additional disclosures would have been helpful in your evaluation of the
company’s financial health?
There are notes regarding the fair value measurements of assets and liabilities as well as
the foreign currency translation and remeasurement. These factors are important in determining
current fair values or the actual foreign currency rate or value. These two factors can affect the
shape or the financial health of the company in the long run.
Based on your additional analysis of the company, how has your evaluation of the
company’s financial health changed since your analysis during Week 4?
The analysis of the notes to the consolidated financial statements is a must to any
students as it will further explain and clarify the meaning of policies and various aspects of the
overall consolidated financial statements. Thus, the notes to the consolidated financial statements
do really make a difference in understanding the company?s financial health. Without the notes,
interested parties may still need more details or clarifications on the financial statements.
Conclusion
In conclusion, analyzing the notes to the consolidated financial statements can help a user
to further understand the overall financial health of the company. Some companies do have
investments in some entities and it is important to identify the notes on these investments and
read upon them for full understanding.
EQUITY INVESTMENT ANALYSIS AND ANALYSIS ON NOTES TO THE
FINANCIAL STATEMENTS
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References
U.S. Securities and Exchange Commission, Retrieved from:
https://www.sec.gov/Archives/edgar/data/320193/000032019317000070/a10k201793020
17.htm

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