Starbucks : Financial Analysis Part 2

Within the coffee industry Starbucks Corporations has grown from a small shop to a leading coffee distributor, proving to have financial strength and determination to continue growth. With the weakening economy the continued success of Starbucks

Financial statements provide users with information for evaluating an entity’s performance and financial status and thus help them to make informed decisions in their dealings with the entity. To assess these aspects, the users have various tools that they can employ. For instance, ratio analysis helps the users to detect any significant changes in an entity’s operating performance within a given period and thus indicate the risks and opportunities of the entity being reviewed (Helfert, 2001). Further, calculating ratios of companies in the same industry can help to highlight the companies that are performing below the industry average and thus help investors to choose the best company to choose from among alternatives. Apart from investors, ratio analysis can also help creditors evaluate a company’s liquidity and thus assess its ability to pay its debts on time (Helfert, 2001). Other ratios such as efficiency ratios can help managers to determine optimal uses of the entity’s assets and thus work towards enhancing efficiency. Apart from ratio analysis, horizontal analysis can also be used to reveal the trends of individual items in an entity’s income statement and balance sheet and thus help to unearth the items that may have affected the entity’s performance during a specific period. The horizontal analysis and ratio analysis of the financial statements of Starbucks Corporation that is the subject of this paper indicate that

Starbucks shares have gone up and down during the past 3 weeks. “The results, announced after markets closed, sent Starbucks shares down 3.5% in after-hours trading.”(Weise,E) I bought 100 stocks from Starbucks; it first started off at 55.37 and increased to 56.31. I expected for Starbucks performance to be the best, but its stocks are unreliable. Their percentage week change fluctuates. When I initially started doing research on Starbucks the week percentage was at -1.02% and has reach to 2.41%, but later went down to .66%. Their stocks have been unsteady and their weakness is that the prices of their coffee is expensive. “By contrast, a year of drinking at Starbucks, based on two $2 cups a day, will run more than $1,400--not including any snacks

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 succeeding content of this executive summary provides an analysis on Starbucks’ Corporation profit using the company’s most three most recent annual reports. Team B uses “the information contained in the company’s balance sheet and income statement noting that annual reporting period and fiscal year mean year-end numbers. Additionally, included is the company history, audit for the company, stock exchange listing, cash and cash equivalents at the end of its 2 most annual reporting periods. Moreover, total current assets, largest current assets, company’s total assets at the end of its 2 most recent annual reporting years. Furthermore, accounts payable,

The cost of revenue, or goods sold, is 86.3% of the total expense distribution for Starbucks.

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.

My company is Starbucks, which is a quick service chain coffee shop. Among its many competitors is McDonald's, especially since they created their McCafe concept. The homepage of the company is http://www.starbucks.com/. There are a number of sources of financial information about the company. The published annual reports are available online (http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-reportsannual). These are not usually revised. For revised and/or restated financial statements, MSN Moneycentral is a reliable aggregator of such information, and also produces some of the key ratios. http://investing.money.msn.com/investments/key-ratios?symbol=SBUX

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.

Critical accounting policies are those that are believed to be most important to the presentation of Starbucks financial position and results. They require the most difficult, subjective and complex judgments. They are often used to make estimates about the effect of matters that are inherently uncertain. Starbucks considers financial reporting and disclosure practices and accounting policies quarterly to ensure that the documents provide accurate and transparent information relative to the current economic and business environment. Within the past three years, no material changes to the accounting methodologies have been used to assess the areas discussed. Starbucks fiscal year ends on the Sunday closest to September 30. Fiscal years 2015, 2014 and 2013 include 52 weeks (sec.gov).

COMPARATIVE ANALYSIS OF FINANCIAL PERFORMANCE OF PUBLIC AND PRIVATE BANKS [IN THE CASE OF SELECTED PRIVATE AND PUBLIC BANKS]

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.

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.

Krispy Kreme’s rapid expansion may have been the reason for its rapid fall. Recently becoming a publicly traded company in April 2000, Krispy Kreme shares had seen amazing growth as they were selling for 62 times earnings. Naturally, this created a buzz around Wall Street, and an “obsession” with Krispy Kreme began as it became one of the hottest stocks on the market. Yet, analysis of the fundamentals of Krispy Kreme needed to by analyzed to see the true threats the company had brought upon itself.