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A Financial Analysis of Starbucks Company

In partial fulfilment for the requirements for

Financial Management 3

Submitted to:

Ms. Mary Ann Raagas, MBA

Submitted by:

Rougiemer S. Dagcuta

Eve Lincoln Enerio

Ma. Caryl Ll. Estor

Julie Anne L. Lucine

Alladin Marohomsalic

October 2017
TABLE OF CONTENTS

Page

Cover Page 1

Table of Contents 2

List of Figures 3

I. Corporate Overview
Starbucks Company
History and Timeline 4
5
II. Marketing Strategy 11

III. Qualitative Data

Financial Perspective 12

IV. Quantitative

Statement of Financial Position 13


Statement of Comprehensive Position 16
Statement of cash Flows 17
Ratio Analysis 18

V. Credit Policy 19

VI. Conclusion 20

VII. Recommendation 21

VIII. Appendix 22

IX. References 24

2
LIST OF FIGURES

Page

Figure 1 Statement of Financial Position 13

Figure 2 Vertical and Horizontal Analysis of Statement 14


of Financial Position

Figure 3 Statement of Comprehensive Income 16

Figure 4 Statement of Cash Flows 17

Figure 5 Liquidity ratios 18

Figure 6 Profitability ratios 18

Figure 7 Solvency ratios 18

Figure 8 Asset Management ratios 18

3
I. CORPORATE OVERVIEW

Starbucks Coffee Company (SBUX) is an American Corporation

that began operations in Seattle, Washington in 1985. Our

company operates as a roaster, marketer, and retailer of

specialized coffee worldwide and a seller of packed roasted

whole bean and ground coffees, packed tea, single served

products, juices and bottled water. We recently expanded our

product offerings and included fresh food products, pastries,

breakfast and lunch sandwiches, Paninis and other items.

4
History & Timeline

The name of the company was inspired in the Moby Dick’s


novel; Starbuck was the first mate of the ship Pequod.

1971
Starbucks opens first store in Seattle’s Pike Place Market.

1982
Howard Schultz joins Starbucks as director of retail
operations and marketing. Starbucks begins providing coffee
to fine restaurants and espresso bars.

1983
Schultz travels to Italy, where he’s impressed with the
popularity of espresso bars in Milan. He sees the potential
to develop a similar coffeehouse culture in Seattle.

1984
Schultz convinces the founders of Starbucks to test the
coffeehouse concept in downtown Seattle, where the first
Starbucks Caffè Latte is served. This successful experiment
is the genesis for a company that Schultz founds in 1985.

1985
Schultz founds Il Giornale, offering brewed coffee and
espresso beverages made from Starbucks® coffee beans.

1987
Il Giornale acquires Starbucks assets with the backing of
local investors and changes its name to Starbucks
Corporation. Opens in Chicago and Vancouver, Canada.

1988
Offers full health benefits to eligible full- and part-time
employees, including coverage for domestic partnerships.
Total stores: 33

1989
Total stores: 55

1990
Starbucks expands headquarters in Seattle.
Unveils Starbucks Mission Statement.
Total stores: 84

5
1991
Becomes the first privately owned U.S. company to offer a
stock option program that includes part-time employees.
Opens first licensed airport store at Seattle’s Sea-Tac
International Airport.
Total stores: 116

1992
Completes initial public offering (IPO).
Total stores: 165

1993
Opens roasting plant in Kent, Wash.
Announces first two-for-one stock split.
Total stores: 272

1994
Opens first drive-thru location.
Total stores: 425

1995
Begins serving Frappuccino® blended beverages.
Opens first LEED-certified store in Hillsboro, Oregon.
Announces second two-for-one stock split.
Opens roasting facility in York, Pa.
Total stores: 677

1996
Begins selling bottled Frappuccino® coffee drink through
North American Coffee Partnership.
Opens stores in: Japan (first store outside of North
America) and Singapore.
Total stores: 1,015

1997
Establishes the Starbucks Foundation.
Opens stores in: the Philippines.
Total stores: 1,412

1998
Extends the Starbucks brand into grocery channels across
the U.S.
Opens in underserved neighborhoods through joint-venture
partnership with Magic Johnson.
Launches Starbucks.com.
Establishes the CUP Fund emergency financial assistance
fund for partners.

6
Opens stores in: England, Malaysia, New Zealand, Taiwan and
Thailand.
Total stores: 1,886

1999
Acquires Tazo Tea.
Partners with Conservation International to promote
sustainable coffee-growing practices.
Acquires Hear Music, a San Francisco–based music company.
Announces third two-for-one stock split.
Opens stores in: China, Kuwait, Lebanon and South Korea.
Total stores: 2,498

2000
Establishes licensing agreement with TransFair USA to sell
Fairtrade certified coffee in U.S. and Canada.
Opens stores in: Australia, Bahrain, Hong Kong, Qatar,
Saudi Arabia and United Arab Emirates.
Total stores: 3,501

2001
Introduces ethical coffee-sourcing guidelines developed in
partnership with Conservation International.
Introduces the Starbucks Card.
Announces fourth two-for-one stock split.
Opens stores in: Austria, Scotland, Switzerland and Wales.
Total stores: 4,709

2002
Establishes Starbucks Coffee Trading Company (SCTC) in
Lausanne, Switzerland.
Launches Wi-Fi in stores.
Opens stores in: Germany, Greece, Indonesia, Mexico, Oman,
Puerto Rico and Spain.
Total stores: 5,886

2003
Acquires Seattle Coffee Company, which includes Seattle’s
Best Coffee® and Torrefazione Italia® coffee.
Opens roasting facilities in Carson Valley, Nev., and
Amsterdam, Netherlands.
Opens stores in: Chile, Cyprus, Peru and Turkey.
Total stores: 7,225

2004
Opens first Farmer Support Center in San Jose, Costa Rica.
Introduces Starbucks Coffee Master Program.

7
Opens stores in: France and Northern Ireland.
Total stores: 8,569

2005
Acquires Ethos Water.
Announces fifth two-for-one stock split.
Opens stores in: Bahamas, Ireland and Jordan.
Total stores: 10,241

2006
Launches the industry’s first paper beverage cup containing
post-consumer recycled fiber.
Opens stores in: Brazil and Egypt.
Total stores: 12,440

2007
Eliminates all artificial trans-fat and makes 2 percent
milk the new standard for espresso beverages.
Opens stores in: Denmark, the Netherlands, Romania and
Russia.
Total stores: 15,011

2008
Chairman Howard Schultz returns as chief executive officer
and begins transformation of the company.
Acquires Coffee Equipment Company and its Clover® brewing
system.
Adopts new Mission Statement “To inspire and nurture the
human spirit – one person, one cup and one neighborhood at
a time.”
Launches My Starbucks Idea, Starbucks first online
community. Also joins Twitter and debuts Starbucks Facebook
page.
Opens stores in: Argentina, Belgium, Bulgaria, Czech
Republic and Portugal.
Total stores: 16,680

2009
Launches Starbucks VIA® Instant
Opens Farmer Support Center in Kigali, Rwanda.
Launches My Starbucks Rewards® loyalty program and
Starbucks Card mobile payment.
Opens stores in: Aruba and Poland.
Total stores: 16,635

8
2010
Expands digital offerings for customers with free unlimited
Wi-Fi, Starbucks Digital Network.
Seattle’s Best Coffee reinvents business strategy to extend
brand’s reach.
Opens stores in: El Salvador, Hungary and Sweden.
Total stores: 16,858

2011
Launches first annual Global Month of Service to celebrate
company’s 40th anniversary.
Opens first Community Stores in Harlem and Crenshaw
neighborhoods.
Launches Starbucks® K-Cup® packs.**
Acquires Evolution Fresh.
Opens Farmer Support Center in Mbeya, Tanzania.
Launches Create Jobs for USA to encourage small-business
growth.
Opens stores in: Guatemala, Curacao and Morocco.
Total stores: 17,003

2012
Introduces Starbucks® Blonde Roast.
Opens Farmer Support Centers in Manizales, Colombia and
Yunnan, China.
Acquires La Boulange® bakery brand to elevate core food
offerings.
Launches Starbucks Refreshers® beverage platform.
Acquires Teavana to transform the tea category.
Opens stores in: Costa Rica, Finland, India and Norway.
Total stores: 18,066

2013
Strengthens ethical sourcing efforts with coffee farming
research and development center in Costa Rica.
Starbucks CEO Howard Schultz reinforces company’s
commitment to marriage equality at company’s Annual
Shareholders Meeting.
Come together petition urges U.S. elected leaders to reopen
the government.
Opens stores in: Vietnam and Monaco.
Total stores: 19,767

2014
Enhances iPhone app with shake to pay and digital tipping.
Launches Starbucks College Achievement Plan with Arizona
State University to offer qualifying Starbucks U.S.

9
partners the opportunity to complete a college degree
through ASU’s online degree program.
Announces commitment to hiring 10,000 veterans and military
spouses by 2018.
Opens first Starbucks Reserve® Roastery and Tasting Room in
Seattle.
Launches Starbucks Mobile Order & Pay.
Hosts first in a series of Partner Open Forums to discuss
race relations in America.
Opens stores in: Brunei and Colombia.
Total stores: 21,366

2015
Launches Cold Brew iced coffee and Evolution Fresh™
handcrafted smoothies.
Announces sixth two-for-one stock split.
Commits to hiring 10,000 opportunity youth by 2018.
Expands Starbucks College Achievement Plan to offer full
tuition coverage for all four years of an undergraduate
degree for qualifying U.S. Starbucks partners. Commits to
25,000 partners graduating by 2025.
Reaches 99% ethically sourced coffee milestone.
Opens stores in: Panama
Total stores: 22,519 (as of June 28, 2015)

10
II. MARKETING STRATEGY

 Starbucks Coffee’s Products

1. Coffee
2. Tea
3. Pastries
4. Frappuccino beverages
5. Smoothies
6. Merchandise (mugs, instant coffee, etc.)

 Place in Starbucks Coffee’s Marketing Mix

The company offers most of its products through Starbucks


cafés. The following are the main places used for the
distribution of products:

1. Cafés
2. Online Store
3. Starbucks App
4. Retailers

 Starbucks Coffee’s Promotions

1. Advertising
2. Public relations
3. Sales promotions

 Starbucks Coffee’s Prices and Pricing Strategy

Starbucks uses a premium pricing strategy. This pricing


strategy takes advantage of the behavioral tendency of people
to purchase more expensive products on the basis of the
perceived correlation between high price and high value. The
company’s coffee products are more expensive than most
competing products, such as McDonald’s Premium Roast. Through
this pricing strategy, the company maintains its high-end
specialty image. This part of Starbucks Coffee’s marketing mix
directly relates with the firm’s generic strategy, thereby
helping the business maintain its premium brand image.

11
III. QUALITATIVE DATA

Financial Perspective

• Total net revenue increased 11% to $21.3 million in fiscal


2016 compared to $19.2 million in fiscal 2015.

• Consolidated operating income increased to $4.2 million in


fiscal 2016 compared to operating income of $3.6 million in
fiscal 2015.

• Fiscal 2016 operating margin was 19.6% compared to 18.8% in


2015.

• Earnings per share (EPS) for fiscal 2016 increased to $1.90


and included $0.06 per share for the extra week in fiscal
2016. EPS was $1.82 and included $0.26 per share.

• Cash flows from operations were $4.6 million in fiscal 2016


compared to $3.7 million in fiscal 2015. (The charge was
primarily due to increased earnings, the lapping of the
non-cash acquisition related gain for Starbucks Japan and
the timing of our cash payments for income taxes.

• Capital expenditures were $1.4 million in fiscal 2016


compared to $1.3 million in fiscal 2015.

• In the year 2016, many of their interest expense has


matured.

• Affected on dollar fluctuations

• Affected on pre-existing ownership interest in Starbucks


Japan to fair value upon acquisition.

12
IV. QUANTITATIVE DATA

Starbucks Company
Statement of Financial Position
For the years 2015 and 2016
Amounts reported in $
2016 2015
Current Assets:
Cash and cash 2,128,800 1,530,100
equivalents
Short-term 134,400 81,300
Investments
Net Receivables 768,800 719,000
Inventory 1,378,500 1,306,400
Other Current 350,000 334,200
Assets
Total Current 4,760,500 3,971,000
Assets
Long-Term Assets:
Long-Term 1,496,200 664,500
Investments
Fixed Assets 4,533,800 4,088,300
Goodwill 1,719,600 1,575,400
Intangible Assets 516,300 520,400
Other Assets 417,700 415,900
Deferred Asset 885,400 1,180,800
Charges
Total Assets 14,329,500 12,416,300
Current Liabilities:
Accounts Payable 2,975,700 2,664,300
Short-Term Debt 400,000 0
Other Current 1,171,200 983,800
Liabilities
Total Current 4,546,900 3,648,100
Liabilities
Long-Term Debt 3,202,200 2,347,500
Other Liabilities 689,700 600,900
Deferred Liability 0 0
Charges
Misc. Stocks 0 0
Minority Interest 6,700 1,800
Total Liabilities 8,445,500 6,598,300

13
2016 2015
Stockholder's Equity:
Common Stocks 1,500 1,500
Capital Surplus 41,100 41,100
Retained Earnings 5,949,800 5,974,800
Treasury Stocks 0 0
Other Equity -108,400 -199,400
Total Equity 5,884,000 5,818,000
Total Liabilities & 14,329,500 12,416,300
Equity

Figure 1 Statement of financial position (2015-2016)

Starbucks Company
Statement of Financial Position
For the years 2015 and 2016
Amounts reported in $

Horizontal Vertical Vertical


(2016) (2015)
Current Assets:
Cash and cash 39.13% 14.86% 12.32%
equivalents
Short-term 65.31% 0.94% 0.65%
Investments
Net Receivables 6.93% 5.37% 5.79%
Inventory 5.52% 9.62% 10.52%
Other Current Assets 4.73% 2.44% 2.69%
Total Current Assets 19.88% 33.22% 31.98%
Long-Term Assets:
Long-Term 125.16% 10.44% 5.35%
Investments
Fixed Assets 10.90% 31.64% 32.93%
Goodwill 9.15% 12.00% 12.69%
Intangible Assets -0.79% 3.60% 4.19%
Other Assets 0.43% 2.91% 3.35%
Deferred Asset -0.25% 6.18% 9.51%
Charges
Total Assets 15.41% 100.00% 100.00%

14
Horizontal Vertical Vertical
(2016) (2015)
Current Liabilities:
Accounts Payable 11.69% 20.77% 21.46%
Short-Term Debt NI 2.79%
Other Current 19.05% 8.17% 7.92%
Liabilities
Total Current 24.64% 31.73% 29.38%
Liabilities
Long-Term Debt 36.41% 22.35% 18.91%
Other Liabilities 14.78% 4.81% 4.84%
Deferred Liability
Charges
Misc. Stocks
Minority Interest 272.22% 0.05% 0.01%
Total Liabilities 28.00% 58.94% 53.14%
Stockholder's Equity:
Common Stocks 0.01% 0.01%
Capital Surplus 0.29% 0.33%
Retained Earnings -0.42% 41.52% 48.12%
Treasury Stocks
Other Equity -0.46% -0.76% -1.61%
Total Equity 1.13% 41.06% 46.86%
Total Liabilities & 15.41% 100.00% 100.00%
Equity

Figure 2 Horizontal and vertical analysis (2015-2016)

15
Starbucks Company
Statement of Comprehensive Income
For the years 2015 and 2016
Amount reported in $

2016 2015 Horizontal Vertical Vertical


(2016) (2015)
Total Revenue 21,315,900 19,162,700 11.24% 100% 100%
Cost of Revenue 8,511,100 7,787,500 9.29% 39.93% 40.64%
Gross Profit 12,804,800 11,375,200 12.57% 60.07% 59.36%
Operating
Expenses:
Research and 0 0 0 0 0
Development
Sales, General 7,970,300 7,130,200 11.78% 37.39% 37.21%
& Etc.
Non-recurring 0 0 0 0 0
Other 980,800 893,900 9.72% 4.60% 4.66%
operating
Operating 4,171,900 3,601,000 15.85% 19.57% 18.79%
Additional 108,000 372,500 -71.01% 0.51% 1.94%
EBIT 4,279,900 3,973,500 7.71% 20.08% 20.74%
Interest 81,300 70,500 15.32% 0.38% 0.37%
Expense
Earnings 4,198,600 3,903,000 7.57% 19.70% 20.37%
before tax
Income tax 1,379,700 1,143,700 20.63% 6.47% 5.97%
Minority -1,200 -1,900 -36.84% 0.01% 0.01%
Interest
Unconsolidated 318,200 249,900 27.33% 1.49% 1.28%
Subsidiary
Net Income 3,135,900 2,946,400 6.43% 14.71% 15.38%
Net Income 2,817,700 2,757,400 2.19% 13.22% 14.39%
Figure 3 Statement of Comprehensive Income (2015-2016)

16
Starbucks Company
Statement Cash Flows
For the years 2015 and 2016
Amounts reported in $

2016 2015
Net Income 2,817,700 2,757,400

Cash Flows-Operating Activities


Depreciation 1,030,100 933,800
Net Income Adjustments 373,100 -222,800
Changes in Operating Activities
Accounts Receivable -55,600 -82,800
Changes in Inventories -67,500 -207,900
Other Operating Activities 248,800 261,500
Liabilities 227,300 308,00
Net Cash Flows-Operating 4,575,100 3,749,100
Cash Flows-Investing Activities
Capital Expenditures -1,440,300 -1,303,700
Investments -807,500 60,900
Other Investing Activities 24,900 -277,500
Net Cash Flows-Investing -2,222,900 -1,520,300
Cash Flows-Financing Activities
Sale and Purchase of Stock -1,834,900 -1,605,100
Net borrowing 1,254,500 238,400
Other Financing Activities -114,400 -93,600
Net Cash Flows-Financing -1,750,000 -2,256,500
Effect of Exchange Rate -3,500 -150,600
Net Cash Flow 598,700 -178,300
Figure 4 Statement of Cash Flows 2015-2016

17
RATIO ANALYSIS

Liquidity Ratios 2016 2015 Industry Average

Current ratio 1.05x 1.09x 1.2x


Quick ratio 0.74x 0.73x 0.55x

Figure 5 Liquidity Ratios

Profitability Ratios 2016 2015 Industry Average

Gross Margin 60% 59% 46%


Operating Margin 20% 19% 13%
Pre-Tax Margin 20% 20% 11%
Profit Margin 13% 14% 8%
Return on Assets 20% 22% 7%
Return on Equity 48% 47% 23%
After Tax ROE 48% 47% 29%
Figure 6 Profitability Ratios

Solvency Ratios 2016 2015 Industry average

Debt-to-equity 144% 113% 142%


Debt-to-asset 59% 53% 55%
Times Interest Earned 53x 56x 23x
Figure 7 Solvency Ratios

Asset Management 2016 2015 Industry Average


Ratios
Inventory Turnover 15% 15% 19%
Days Sales 13 days 14 days 8 days
Outstanding
Fixed Asset Turnover 5% 5% 1%
Figure 8 Asset Management Ratios

18
V. CREDIT POLICY

 Your Account.

When you make a purchase from the Site, you may create an
account as part of the checkout process.

 Acceptance of Order

Your placement of an order does not necessarily assure that we


will accept your order. In addition, before accepting your
order, we may require additional information if you have not
provided all of the information required by us to complete the
order.

 Payment Terms.

Starbucks currently accepts Starbucks gift cards, Starbucks


Store Credit card (i.e., in-store credit), Visa, MasterCard,
American Express, Discover credit cards and PayPal. By
submitting your order, you represent and warrant that you are
authorized to use the designated credit card and authorize us to
charge your order (including taxes, shipping and handling) to
that card. If the card cannot be verified, is invalid or is
otherwise not acceptable, your order may be suspended or
cancelled automatically.

 Return and Exchange Policies.

If for any reason you are not satisfied with your


store.starbucks.com coffee, tea, or syrup purchase, you may
return it to store.starbucks.com for a refund of the purchase
price within 30 days of purchase.

 Limitation of Liability.

THE FULL EXTENT PERMITTED BY LAW, STARBUCKS' LIABILITY SHALL BE


LIMITED TO THE AMOUNT ACTUALLY PAID FOR THE PURCHASE OF PRODUCTS
FROM THIS SITE.

19
VI. CONCLUSION
Starbucks is leading the market because of their dominating
global presence and product differentiation. Starbucks'
implemented strategy of retail locations and on-site
partnerships have received greater response rates, giving them
the leading seat within the mature industry.

Starbucks' success can also be seen when analyzing their


financial statements. In addition, the preceding performance
analysis shows that Starbucks is financially performing well
in almost every aspect. From these comparative analyses, it is
apparent that Starbucks has a strong market position and
financial outlook.

SBUX short term and long term aspects are quite promising
since it was able to maintain its standing in the industry.
It has able to utilize all of its assets in generating
profits. As observed, the company is capable of paying off all
of its short term and long term debts. In conclusion, Starbucks
is leading the market because of their dominating global
presence and product differentiation.

In terms of Profitability, the company is observed to have


exceeded the industry average. This means that SBUX is indeed
very profitable.

In general, SBUX is observed to have been operating


efficiently. Its Financial and Marketing aspect has proved why
they have remained the best and the most patronized in its
industry over the years.

20
VII. RECOMMENDATION

To the Management

The management is encouraged to continue their commitment


in the company and maintain the high level of profitability.
They are also encouraged to find ways to lessen the operating
and other expenses of the company for them to be able to obtain
greater profit in the succeeding operating years to come.

To the Investors

The investors are encouraged to invest at Starbucks Company


because the company has a high level of profitability. Also it
was observed that the company’s EPS has increased to $1.16 in
2017 therefore there has been a higher return to its investors.
Starbucks Corporation is by far the best-performing restaurant
stock of the last generation. Since its 1992 IPO, the coffee
giant's shares are up more than 18,000%, and it is now the
second most valuable restaurant chain, behind McDonald's. If
Starbucks continues to add another 2,000 stores a year, it's
likely to eclipse McDonald's in the next five or 10 years.

To the Public

The public is encouraged to continue patronizing Starbucks


products for the following reasons:

 Starbucks is convenient as is located almost everywhere.


 Starbucks is consistent and you will exactly what you're
getting every time.
 In most cases, the prices of drinks at Starbucks are
comparable to similar drinks at other coffee shops.
 Starbucks markets itself very well and generally provides a
good user experience.

21
VIII. APPENDICES

Financial Ratios Formula 2016 2015


Liquidity

Current ratio 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 1.05x 1.09x


𝑐𝑢𝑟𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Quick ratio 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑖𝑒𝑠 0.74x 0.73x


𝑐𝑢𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Profitability
Ratios
Gross Margin 𝐺𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡 60% 59%
𝑇𝑜𝑡𝑎𝑙 𝑝𝑟𝑜𝑓𝑖𝑡
Operating Margin 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑝𝑟𝑜𝑓𝑖𝑡 20% 19%
𝑇𝑜𝑡𝑎𝑙 𝑝𝑟𝑜𝑓𝑖𝑡

Pre-Tax Margin 𝐸𝐵𝐼𝑇 20% 20%


𝑇𝑜𝑡𝑎𝑙 𝑟𝑒𝑣𝑒𝑛𝑢𝑒

Profit Margin 𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 13% 14%


𝑇𝑜𝑡𝑎𝑙 𝑟𝑒𝑣𝑒𝑛𝑢𝑒

Return on Equity 𝑇𝑜𝑡𝑎𝑙 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 48% 47%


𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟 ′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦

Return on Assets 𝑇𝑜𝑡𝑎𝑙 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 20% 22%


𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠

After Tax ROE 𝐴𝑇 𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 48% 47%


𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟 ′ 𝑠 𝐸𝑞𝑢𝑖𝑡𝑦
Solvency Ratios

Debt-to-equity 𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡 144% 113%


𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦

Debt-to-asset 𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡 59% 53%


𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
Times Interest 𝐸𝐵𝐼𝑇 53x 56x
Earned 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐸𝑥𝑝𝑒𝑛𝑠𝑒

22
Asset Management Formula 2016 2015
Ratios

Inventory 𝐶𝑂𝐺𝑆 15% 15%


Turnover 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

Days Sales 𝐴𝑐𝑐𝑜𝑢𝑛𝑡𝑠 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 13 days 14 days


Outstanding 𝑇𝑜𝑡𝑎𝑙 𝐶𝑟𝑒𝑑𝑖𝑡 𝑠𝑎𝑙𝑒𝑠
( )
365
Fixed Asset 𝑁𝑒𝑡 𝑠𝑎𝑙𝑒𝑠 5% 5%
Turnover 𝐹𝑖𝑥𝑒𝑑 𝑎𝑠𝑠𝑒𝑡𝑠

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IX. REFERENCES

 http://financials.morningstar.com/ratios/r.html?t=SBUX
 http://www.nasdaq.com/symbol/sbux/financials?query=rat
ios
 http://www.marketwatch.com/investing/stock/sbux/profil
e
 http://store.starbucks.com/customer-
service/terms/terms-of-sale.html
 https://www.starbucks.com/card/card-terms-and-
conditions
 https://www.starbucks.com/
 http://panmore.com/starbucks-coffee-marketing-mix-4ps-
analysis
 https://www.stock-analysis-
on.net/NASDAQ/Company/Starbucks-Corp/Performance-
Measure/Return-on-Capital
 http://www.investopedia.com/articles/markets/111015/st
arbucks-6-key-financial-ratios.asp
 http://www.nasdaq.com/symbol/sbux/analyst-research
 https://www.zacks.com/registration/pfp/?ALERT=ZRMODULE
&d_alert=rd_final_rank&ADID=zp_quote_prind_rank&t=SBUX
&ticker=SBUX&icid=zpi_quote_prind_rank
 https://www.gurufocus.com/

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