FIN/370 Ethics And Compliance

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Ethics and Compliance FIN/370 Ethics and Compliance Ethics and compliance play an immense role in many organizations. The ethics and compliance within an organization depict the standards of legal, ethical, and professional behavior of the organizational culture. It also outlines a set of fundamental principles, which is used as a basis for operational requirements and prohibitions. Therefore, most organizations define their most important guiding values and formulate behavioral standards for employees to enforce those values to the roles and responsibilities that they hold within the organization. Starbucks is one of the companies that highly upholds business ethics and compliance. In our team paper, we will assess the role of ethics…show more content…
To protect the Starbucks brand, culture, and reputation, each employee is responsible for adhering to the company’s core values. This includes complying with the law, in addition to demonstrating ethical conduct. The ethical culture of Starbucks determines the quality of decisions made by employees. If the employees are working in an ethical environment, they will be compelled to make ethical decisions. Employees are expected to make good decisions using their values, knowledge, and previous experiences. The company commits to providing employees with additional resources, which will allow them to perform in a legal and ethical manner. Ethical behavior is important for the company to remain financially strong. Violations of the law can result in large criminal and civil penalties for Starbucks (Starbucks, 2015). For example, if the company were found guilty of altering, concealing, or falsifying financial documents, it could result in the responsible parties facing up to 20 years in prison, or a substantial amount of fines (Sarbanes-Oxley Act 2002,…show more content…
The current ratio is a measurement of the firm’s liquidity, and ability to cover its obligation. Starbucks currently holds enough current assets and is capable of paying its bills as they become due. In 2014, the current ratio was higher than the industry average of 1.14 (Starbuck Annual Report, 2014). In 2013, the current ratio was slightly lower than the industry average of 1.16 (Starbucks Annual Report, 2013). Over the past two years, Starbucks has improved this ratio, showing strength and stability. Starbuck’s debt ratio for 2014 was .51, and .61 in 2013. The debt ratio provides a measurement of how much of a firm’s assets were financed by borrowing, or debt financing. A higher ratio indicates more outside financing, whereas a lower ratio indicates more assets were acquired using cash, or owner financed. Borrowing gives a company financial leverage, and can improve credit rating. Starbucks maintains a good amount of financial leverage (Starbucks Corp,

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