Starbucks Financial Analysis

3. The primary assets that Starbucks holds are outlined on the balance sheet. The biggest category of asset is with plant, property and equipment. The notes to

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.

Starbucks’ D/E ratio has seen an increase, almost doubling between 2012 and 2013. Years prior to that it was holding steady. Sbux appears to be utilizing more debt in their expansion.

The information to be disclosed includes the sales revenue from each segment, capital additions, assets, and liabilities. Starbucks annual reports’ shows financial performance from its four main reportable operating segments; America, Europe, China and Channel Development.

If you were an accountant for a potential investor in this company, explain which of these ratios would be of the most interest to you. In your opinion, what other ratio or ratios beyond the ones listed above should also be considered in an investment context?

Starbucks Corporation is an American global coffee company and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 20,366 stores in 61 countries, including 13,123 in the United States, 1,299 in Canada, 977 in Japan, 793 in the United Kingdom, 732 in China, 473 in South Korea, 363 in Mexico, 282 in Taiwan, 204 in the Philippines, 164 in Thailand and 3 in India.

Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation of property, plant and equipment, which includes assets under capital leases, is provided on the straight-line method over estimated useful lives, generally ranging from two to seven years for equipment and 30 to 40 years for buildings. Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease life, generally 10 years. For leases with renewal periods at the Company’s option, Starbucks

We evaluated the financial performance of Starbucks by computing various ratios based on the company’s most current audited financial statements. Specifically, we evaluated the firm’s liquidity, operating profitability, capital structure, and market value. Additionally, we identified Starbucks’ competitors and benchmarked the company’s performance against the peer group. Finally, we defined what we believe the key factors are causing the current condition. Our assessment and results are presented below.

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,

Starbucks (SBUX) Corporation according to Plunkett Research, Ltd. ranks in their industry group as number one in sales and profits. National and internationally Starbucks Corporation own 16,858 stores

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 Corporation is an American global coffee company and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 20,366 stores in 61 countries, including 13,123 in the United States, 1,299 in Canada, 977 in Japan, 793 in the United Kingdom, 732 in China, 473 in South Korea, 363 in Mexico, 282 in Taiwan, 204 in the Philippines, and 164 in Thailand.

The company that I am writing about is Starbucks, the international coffee shop chain. The company's financial statements for this analysis are from the FY2011 Annual Report and 10-K. The company has 10787 stores in the United States, of which 38% are franchised and the remainder are company-owned. The franchise model is more common when the company operates internationally. There are 6216 Starbucks stores internationally and of these 63% are franchises, with just 37% company-owned. The franchise model for international expansion has been utilized to help Starbucks expand quickly in foreign countries and to mitigate foreign political risk and to ensure that the product/service offering is tailored to local tastes (Thompson, 2012). The company is now in the process of buying back some overseas franchise stores in order to retain more profits for itself (Franchise Press, 2011). This paper will take a look at the company's most recent annual report to analyze the financial statements.

The Starbucks Company is a purveyor of gourmet coffee that was founded in 1971 at Seattle’s Pike Place Market (Retrieved March 10, 2015, from http://www.starbucks.com/about-us/company-information). At that time Starbucks was a single storefront that offered premium, fresh roasted whole bean coffees. Since opening that single store Starbucks has grown to an international presence with branding that is recognizable worldwide. In addition, Starbucks has increased their product line beyond hot and cold coffee beverages to include hot and cold teas, packaged whole bean and ground coffees, high quality, fresh foods and coffee making equipment and supplies. Starbucks operates a total of 19,767 company operated and licensed stores and operates in 62 countries. In addition to the Starbucks’ brand the company also owns and operates other well-known brands such as Teavana and Seattle’s Best Coffee. (Retrieved March 10, 2015, from http://news.starbucks.com/uploads/documents/Starbucks_Fiscal_2013_Annual_Report_-_FINAL.PDF)

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.