Analysis of Annual Report of Starbucks

2713 Words Jun 13th, 2011 11 Pages
An Assignment on
Analysis of Annual Report of Starbucks

Prepared for
Principles of accounting

Submitted to:
Salma Karim
Associated professor
Faculty of Business Studies
University of Dhaka
Submitted by:
Sharaban-E-Alam Tohra

December 13, 2009
Faculty of Business Studies
University of Dhaka

Table of Contents Company Profile 3 Where is the Company & Where is It Going 5 Principle Source and uses of Cash 7 Amount of Money Collected from the Customers in Last 5 Years 8 Return on Assets (ROA) 9 Total Asset Turnover 10 Return on Equity (ROE) 11 Number of Days Inventory Held on Average 12 Number of Days to Collect Account Receivable on Average 13 Current ratio 14 Quick Ratio
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Where is the Company & Where is It Going
Starbucks generates strong cash flows has solid liquidity. The company executes rigorous cost cutting initiatives to improve its bottom-line. However, throughout fiscal 2008, Starbucks continued to experience declining revenue, particularly in US operation. The decline is largely attributed to lower customer traffic.
Since January 2008, Starbucks has taken steps to address the deterioration in the US retail environment revitalize its global support structure. These steps have been designed to structure the company’s business for long-term profitable growth. Because of the continued weak economy and decreased customer traffic, as well as the cost associated with the store closures and other actions in its transformation strategy, the company’s fiscal 2008 results were impacted negatively in the following ways: * Consolidated operating income was $ 503.9 million in fiscal 2008 and operating margin was 4.9% compared to previous year’s $ 1,054 million and 11.2% respectively. * EPS for fiscal 2008 was down to $ 0.43 from 2007’s $ 0.87. Cost associated with restructuring and execution of transformation agenda affected EPS by approximately $ 0.28.
Starbucks has also taken some significant actions in fiscal 2008 to transform and rejuvenate its business. A plan to close nearly 600 under performing company operated stores

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