Financial Analysis of Starbucks

1. There are several sections to an annual report. The two main sections are the written section from management to shareholders, and the second section is the 10-K. The written section is entirely optional; some companies omit it while others prepare an extensive write-up. There is no set form for this section. Starbucks' 2011 Annual Report has a 4 page write-up with a letter from Howard Schultz and a brief description of the company's business for the past year. The 10-K does have a set form. It includes a five-part discussion of the business; the financial data, which is the largest part of the report; a five-part discussion of relating to governance and the executive and the last part is the exhibits.

In 2015, Starbucks continued to be the “premier roaster, marketer and retailer of specialty coffee in the world” (“Form 10-K”, 2016). For the 2015 fiscal year, Starbucks continued to provide record financial results and record cash returns to shareholders.

KEVIN R. JOHNSON, 48, has served as the Chief Executive Officer of Juniper Networks, Inc., a leading provider of high-performance networking products and services, since September 2008.

Starbucks Corporation, generally known, as Starbucks Coffee is the leading retailer and a brand of world’s forte coffee in the world, with more than 15,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim, wherever in this world where premium quality coffee is in demand. Starbucks is the largest coffeehouse company in the world ahead of UK rival Costa Coffee, with 20737 stores in 63 countries and territories, including 11910 in the United States, 1496 in China, 1442 in Canada, 1052 in Japan and 772 in the United Kingdom. The first Starbucks was open in 1970. The name was inspired from Herman Melville’s Moby Dick, a definitive American novel regarding the 19th century whaling industry. The nautical name matches seamlessly for a store that imports the world’s finest coffees to the cold thirsty people of Seattle. In May 1998, Starbucks have finally successfully entered the European market through its acquirement of 65 Coffee Company stores initially originated from Seattle in the UK. Both companies shared a common culture, focusing on a great commitment to customized coffee, similar company values and a mutual respect.

The determinants of Starbucks profitability over time are variable costs and fixed costs. “A variable cost is a cost that change in direct proportion to a change in the level of activity (dict). Variable costs for Starbucks would include labor, coffee beans, dairy, and plastic products. A fixed cost is indirect costs of business expenses that remain unchanged (dict). Fixed costs for Starbucks include rent, taxes, and insurance as well as advertising. In the figure below (fig 1) we have Starbucks financial data in millions for the year of 2015. This includes their operating expenses, net revenues, such as company-operated stores, licensed stores, CPG, food service. It also includes their total net revenues and their balance sheet. As we can see “Operating costs dropped in the fiscal year

Starbucks financial statements were analyzed for the fiscal year ended September 27, 2015. Like all public companies, annual and quarterly financial statements are required to allow regulators and other interested parties to analyze the financial status and management decision making of the company. This analysis focuses on the results of Starbucks most recent published annual report containing their balance sheets, statement of earnings and cash flows. These statements will be analyzed against the results of one of its competitors, Dunkin Donuts, to investigate how the two companies compare to each other. It was noted that Starbucks and Dunkin Donuts do not have corresponding fiscal year ends. The data therefore is not directly comparable since the reports do not reflect the same time period of data but should provide additional insight. The paper will attempt to provide a brief analysis of Starbucks operations in terms of its liquidity, leverage, activity, profitability and growth ratios used by analysts in the industry.

Starbucks Corporation the leading coffeehouse in the world. It was founded in 1971 by Jerry Baldwin, Zev Siegel, and Gordon Bowker in Seattle, Washington. Howard Schultz was the key person who turned the company a huge success around the globe. Since the beginning Starbucks has been facing many tough challenges and yet it is still remains as the best coffee House in the world. The mission of Starbucks is to inspire and nurture the human spirit- one person, one cup, and one neighborhood at a time. Their main competitors are include Dunkin Donuts, Biggby Coffee, Caribou Coffee, McDonald 's, Panera Bread, and Einstein Bagels, ,Secret Recipe, Old Town White Coffee and Coffee Bean. The political stability shows what

The notes to the financial statements can reveal a lot about the details of the line item in question. It is often said that to fully understand financial statements, one must read the notes. The company that I have selected is Starbucks, and to that end their financial statements are available online at MSN Moneycentral. To read the notes, however, I will need the annual report.

In this assignment, a savvy financial analyst researching companies in which to invest a U.S. publically-traded company that would be a good investment was chosen. After a lengthy search, a company that my family is unduly familiar with, Starbucks, was chosen and in the following pages a financial analysis will be described.

Starbucks’ Total fixed assets increased from $3,200.5 billion in 2013 to $3,519 billion in 2014. This was a 9.95% increase. As a percentage of total assets on the balance sheet, fixed assets increased from 27.79% to 32.73% (Starbucks,

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:

Starbucks’ shares have grown more than 1500% over the past decade. Financially, it has been an oak tree in an ever changing economy with customers that have ever changing demands. However, there has been increased concern for the financial viability of the coffee shop a recently announced plan to close down over 600 stores that were said to be underperforming domestically. That means that more than 1,000 jobs will be eliminated. As scary as that is on the local front to top management, the executive staff feels that it is the only way to recover from it’s shocking $108.7M loss for the 2nd quarter this fiscal year.

1.Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Justify your opinion.

The same goes for its marketing strategy. This culture consists of two key points. The first is our image. When you walk into a Starbucks, a friendly face greets you. The color scheme is very earthy and warm. The same thing can be said about the smells. We want to make it a comfortable place for you to relax. It could even be where you and your wife met, or where you heard your favorite band for the first time. The second is, you are our culture. We want to make sure that you come first. This is why our baristas do their best to remember your regular drinks. And since our culture is you, we know just how to reach you. Weather this be via a mobile phone app, our website, or in-store, we are there for you.

Starbucks has been very successful in implementing the “Starbucks Experience” both in the United States and in Turkey. Inspired by his visit to Italy, Howard Schultz CEO, was charmed by the social glamour of drinking coffee by the cup. Schultz sough to differentiate Starbucks from the rest of specialty coffee stores and pitched his inspiration to the three original owners, Jerry Baldwin, Zev Siegel and Gordon Bowker. The owners of Starbucks were not fond of expanding the business to what they considered was restaurant business. As such, Schultz ventured on his own to launch his new idea of innovating coffee with success. In 1987, the owners folded their business pursuits with Starbucks and sold all assets and name brand to the visionary Schultz. Starbuck grew rapidly after Schultz purchased it, it went form 11 stores in 1987, to over 900 stores in 1996, and to 6,793 stores by 2007 in North American only. Starbucks Turkey opened in 2003. It was located in one of the busiest and prominent streets in Istanbul where the most affluent citizens roamed. Within five years they were the most rapidly expanding coffeehouse chain in Turkey. By 2008 there were 105 stores in 8 cities serving approximately 30,000 customers per week. Starbucks Turkey was successful due to its consumer, marketing and entry strategies for growth it implemented.