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' Discussion Board #3 AY
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Tn a Strategic Finance article, the authors stated that “COVID-19 1s fundamentally reshaping
wildly fluctuating revenue and incu
ing expensas that did not exist pre-COVID forcing many companies to revise or retract their financial forecasts The
of the valuations depends on the reliability of the forecast assumptions and the valuation parameters. Often by the ime a finance team delivers the latest rounds o
forecasts and budgets to the C-suite, they're outdated.” Follow the lnk read the full article: hitps:
sfmagazin e com/post-entry/aprik2021-fi anci
'forecasting-amid-covid-19/. For this discussion board you must respond to the following questions. ] =.
1. How much reliance can financial analyst place on financial projections and the anticipated cash flows of Sta
ucks over the n
How relevant is Sta
ucks’ historical formation in the post-COVID-19 environment? a
Sta
ucks stock closed at $97.95 on November 18, 2022, the date the Form 10.K for the fiscal year ended October 2, 2022, was filed
How does your valuation estimate on the Valuation tab of the FSAP with this closing price? What do you believe are some reasons fo
difference? What investment decisions is suggested from your results? = =
how businesses and finance teams forecast Businesses are expe
Bv Wednesday, December 7. you should post vour initial Tes onse to the questions By Sunday, December 11, you should vead
cts. Post a response to at least 2 of these messages (postings). eplies should include an insightful comment or altemative viewpoint
thought the same”, le and do not enrich the discussion experience.
“You are right” and other short genenc statements are not accepta
Chapter 11 Assignment
- In this assignment your are to compl
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ely on the financial projections and anticipated cash flows of Sta
ucks over the
: a x : ti next five years with mi wii onk
[ies I the pas few years with minimal “waming®, the 5-vear forecast is too far in advance to confid ie
forecast processes already account for disruptions such as natural disas ters, it was already difficult fo
anticipate projections for long-term disasters such as a pandemic.
2 de Re no longer rely on historical data since this recent pandemic. This post-COVID-19 ep
financial frameworks (example. Three Steps to Move toward ynamic Planning). Historical data js used to build fin
urelevant data contributes to the unreliable forecasts, as mentioned in the previous response. P.
3 The valuation tab estimates a closing price of $114.92 per share. This may differ from the actus] clos
; : have completed since year end. Or the
PE they were looking at to expand customer access that may p y
Co x individual share values.
Ii 1. Even with Sta
ucks’ analysts utilizing processes such as rolling forecasts and collaborate throughout
[if i
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t for natural disas i erhaps in a few years
integrated processes that can better account for natural disasters that will include COVID-19 data as r :
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Discussion 3
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Sta
Ducks has been performing well for the past five years aside from 2020 where there was a slight decrease duet
Th rs show a steady increase of sales, and the fame Sta
ucks has all over the world makes it muc
i11/!l| professionals to purchase from them. This trend will likely stay like that for years to come until Sta
ucks will have to m
|| market. The anticipations will make a great basis of forecast but again they are only forecasts given the cu
ent market. Ni
|| happen in two or three years down the road with any company. The fact that a war is taking place in Ukraine makes the globa econ
||| /and blossom. i
| | Despite, all of this | think those financials will be similar in the years to come with minor ups and downs depending on the inflation
{H | 2. How relevant is Sta
ucks’ historical information in the post-COVID-18 environment?
Sta
ucks was one of the companies that were able to adapt during the pandemic. They operated with drive thru's and made their sales
that they had a drop is sales. in investments, in revenues, and in net income. This is foreseeable in that uncertain event that no one kn
covid 19 information is relevant but not the most accurate one. People spend a little more after the pandemic as they started enjoying doing wh
i free to do during the pandemic. Stores opened back up and the sales increased drastically from 2020. In a way it was expenses that had bee
HHH years. Those historical data are accurate but not as relevant to predict cash in the years to come. HT
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scal year ended October 2, 2022, was filed
elieve are some reasons for this differe
3. Sta
ucks stock closed at $97.95 on November 18, 2022. the date the Form 10K for the fi
| i your valuation estimate on the Valuation Lo of the FSAP with this closing price? What do you
Hie decisions is suggested from your results? : aa
: tion tab, my cu
ent share price came to $ XXXXXXXXXXSince this is higher than the 97.95 stock price as of November 18. 20:
in Yel to the La This shift might have come due to the cu
ent war happening in Ukraine that as a matter of psy as Pa -
the world with America being one of them and Europe the first on the line. Inflation, instability of the market, the index fluctuating day after day 5
over this inflation and interest rates that keep increasing from the Federal Reserve Bank has made the price go down in 2022. Investors are y
toi t in Sta
ucks as they don't know where the market is headed this creates a gap of trust in Sta
ucks and not only. j Panies
Ed DE period. However, considering the market Sta
ucks is not performing bad at all. FLERE Ah es
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Hi cussion Post 3
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of ypoisctions and the nticipated cas
pandemic into consideration for thei p
tion provided. When reviewing a financial s =
a necessary requirement since it can describ yearly
downfalls and an insight to operations, but and investors, bookkeepers, sccountants, an CPAs 0
deeper level to those financial statements.
| io How relevant is Sta
ucks’ historical information in the post-COVID-19 environment?
| think Sta
ucks was able to capture and adapt to the COVID-192 environment The s wit
|| report and that they were unsure of the financial statement impact that id con - They described how the pandemic has in
stores and those stores were made into "to go” only for a time being. Yes his
still unknown for most businesses, especially within the retail and hospitality industry. As businesses
forced in to, Sta
ucks handled the pandemic as best as they could and provided present information with what they had on hand.
| 1 the Form 10
ucks stock closed at $97.95 on November 18, 2022, the date ! )
Sli your valuation estimate on the Valuation tab of the F SAP with this closi
What investment decisions is suggested from your results?
-K for the fiscal year ended October 2, 2022, was fi
ng price? What do you believe are some reasons for th
: i re price came to XXXXXXXXXXSince this is a tad higher than the 97.05 stock price as of November 18, 2022, | can cor Iu
Within my Yalu to Dh, oa that stocks have decreased. When looking at the market today compared to the end of 2021, the ude
there Were Shifts 20 me and personal & business expenses have skyrocketed. It is expected that the cu
ent 2022 stock price would have decreas
multiple shifts. infla ted. Since Sta
ucks has multiple locations across a vast majority of countries, | think there should be little change within the investment
frig: DE is bound to change within the coming months or year, and investments like Sta
ucks should continue to rise despite the cu
ent downfs I
mail Author |
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