Starbucks Corporation 3rd Company Report

2. Starbucks enjoyed strong financial performance in 2011. The company did not explicitly attribute this, but with an 8% rise in same store sales it seems that either the consumer market bounced back, or Starbucks made changes that attracted more consumers. The company feels that it offered better products and a better experience at its stores. The company also credited operating efficiencies and tight control of spending for improved profits. In addition, the company continued its global expansion, which improved the top line, and used the economies of scale it generated as part of its cost control program.

14. Global Enterprises has just signed a $3 million contract. The contract calls for a payment of $.5 million today, $.9 million one year from today, and $1.6 million two years from today. What is this contract really worth if Global Enterprises can earn 12 percent on its money?

For investors who own the 8.25 May ’00-’05 bond, the current bid price for 8.25 May ‘00-’05 bond is 101.25. To compute the theoretical price we have to use bid prices: (129.71875*0.6875) + (29.90625*0.3125) = $98.5273438. This shows that 8.25 May 00-05 bond is overpriced. The profit earned is 101.123-98.5273 = $2.5977. The investors should sell this bond and replace it with any of the undervalued synthetic bonds preferably the first synthetic bond

1. Before maturity, a bond may be selling at the face value or at a price greater or lesser than the face value.The terms “premium” and “discount” refer to the difference that exists from the face value of the bond. Bonds selling at a price greater than the face value are said to be at a premium and the bonds selling at a price lesser than the face value are said to be at a discount.

The bonds have 20 years to maturity, pay interest at 9.3%, have a par value of $1,000 and are currently selling for $890.

It’s a known fact that Starbucks is one of the leading brand in the market.When we analyse the market we find that Mcdonald 's and Dunkin are the competitors in the same product segment. So comparing Starbucks with these competitors will throw light on its grey areas, process and competitive edge in the market.

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.

Moreover, most of the people know the brand Starbucks as the leader of the coffee industry. It is enormously successful and it comes out with no surprise that this will be used as benchmarking against the study of Dunkin’ Donuts.

2. The discount rate for this bond would be 0.70%. I started with an appropriate discount rate to derive my bond purchase price, since I would not purchase a bond without finding out ahead of time what a good price should be.

Through this method, we obtained theoretical yields of the 4.25% coupon bond and 10.625% coupon bond to be 2.899% and 2.639% respectively. The corresponding theoretical prices of the bonds are $108.27 for the 4.25% coupon bond and $149.31 for the 10.625% coupon bond (see Table 1 above).

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.

Starbucks is undoubtedly an international brand. The history of coffee traces back to Ethiopia, Africa, India, Arabia, and Europe, and has been traded abroad since the 11th century. Understanding the demand and widespread market for coffee, Starbucks has triumphantly capitalized both the domestic market, and the varied international markets as well. Possessing about 6,500 retail sites worldwide, Starbucks’ net is spread across thirty countries and has been found as one of the most recognized brands all over the globe in equality to McDonalds and Toyota. This organization’s ability to build an international brand has been unprecedented- particularly since it represents a specialty

Starbucks have shown in the past that they are very good at taking advantage of opportunities. In an strategy alliance with Hewlett Packard, customers could create their own music CD within a Starbucks coffee shop. Thus the company could look for these kind of opportunities to seize. In addition, new markets for coffee are emerging such as India and the Pacific Rim nations, also Europe which is getting more and more accustomed with the brand name “Starbucks”. Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential.

Earnings before income taxes also increased from $3,903.00 to $4,198.60, an increase of 8%. Both net earnings including noncontrolling interests and net earning attributable to Starbucks saw a small percentage increase at 2%. Examining the vertical analysis of the income statement, one can see that all three net revenue categories – company-operated stores (79%), licensed stores (10%), and CPG (11%) – have the same percentage from both years. Similar to net revenues, the 2016 expenses and net earnings have very similar percentages to those of 2015.

Coupon bond is one that is below its nominal value. 99.05 It is less than 100 percent of the cash value of the price, which will be traded. Above the face value of the bond premium bond. 101,15 more than 100 percent of the cash value of your price quote. Market interest rates rise above the coupon rate of the bond discount bond when the bond is. Market interest rates, the bond 's coupon rate is below the bonds when the bond underwriters.