...Content Executive Summary 3 Background 4 Dunkin’ Donuts (Dunkin’ Brands) 4 Starbucks Coffee (Starbucks Corporations) 4 Leader VS Follower 5 Financial Analysis 6 Liquidity Ratio Analysis 6 Debt Analysis 11 Profitability Analysis 13 Stock Investment Analysis 16 Non-Financial Analysis 20 SWOT Analysis 20 PEST Factor Analysis 23 Product Life Cycle Analysis 24 Boston Consulting Group (BCG) Analysis 25 Conclusions and Observations 27 References 29 Executive Summary People love to drink coffee. Coffee shops, independently owned or chains are every corner. Statistics show that people are taking more coffee every day. It is a very profitable business. Nowadays when people think of coffee and its related items, the word “Starbucks” immediately come to mind. Internationally, Starbucks has already become a very famous brand and many are trying to study the secret of its success. In the States, however, another company rivalry is competing with it quite well. Quite often, the Americans are taking preference to this over the Starbucks. The company that is being mentioned is Dunkin’ Donuts. It is without doubt that Dunkin’ Donuts will act as the follower in this industry. Starbucks, on the other hand, is acting the leader. This paper will try to study how the Dunkin’ Donuts are performing by making the benchmarking financial analysis against Starbucks. Financial ratios are prepared and analyzed to evaluate its performance. The study will be focusing...
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...Abstract Financial Ratios are the corner stone of any business establishment. They provide pertinent and valuable information on the success and future of the business. Ratios quantify many aspects of a business and help analyze its financial status. Individual ratio can also be compared to industry averages. This paper will discuss how Starbucks compares in the special eateries industry and how new management aspects will fair in the future of the corporation. History Starbucks is at the top of the list when it comes to specialty coffee shops. It was founded in 1971 as a local coffee bean roaster and retailer named Starbucks Coffee, Tea and Spices in Seattle, Washington. The name Starbucks came from a character in the novel Moby Dick. Today it is one of the world’s largest coffeehouse companies. Howard Schultz joined the company in 1982 and was inspired after a trip to Italy to open up an espresso bar and coffeehouse in the U.S. He opened up II Giornale in 1985. In 1987 Schultz then purchased Starbucks and merged with II Giornale and formed Starbucks Corporation. It started with seventeen stores and it has rapidly continued to grow since then. The first international Starbucks was opened in 1996 in Tokyo, Japan. There are now Starbucks chains around the United States and internationally. Financial Analysis According to Starbucks.com and Wikipedia (2007), Starbucks Corporation earned 7.786 billion dollars in 2006 and employed more...
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...Introduction This report will present a financial analysis of Starbucks Corporation (SBUX). A full breakdown of the companies’ profile and ratio analysis will be provided and methods for improvements will also be provided. A full stock analysis will be included to anticipate Starbucks risks versus their returns on common stock and an estimation of the companies’ fundamental value. This report will also delve into the corporate governance of Starbucks as well as discuss the corporations’ corporate policies. By the end of this report a clear understanding of Starbucks Corporation and various brands under the monikers full financial status so that sound and viable investments decisions can be accurately made. Company Profile Starbucks Corporation retails, brews, markets, and develops a wide and various array of coffee and coffee based products worldwide. Starbucks operates in North and South America, Europe, The Middle East, Africa, and China. In addition to coffee products the company also produces a plethora of teas and bottled waters. Starbucks also provides fresh foods, pastries, and other edibles. The corporation has a partnership with Pepsi- Cola for them to license and sell Starbucks products. The companies’ products are offered through the Starbucks, Teavana, Tazo, Seattles Best Coffee, Evolution Fresh, La Boulange, Ethos, Starbucks VIA, Frappuccino, Starbucks Doubleshot, Starbucks Refreshers, and Starbucks Discoveries iced café Favorites brand names....
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...Starbucks Financial Accounting for Managers ACC556 May 18, 2015 Financial Tools Liquidity, Solvency, and Profitability The company chosen for the investment analysis is Starbucks Corporation. Starbucks offers some of the world’s finest fresh-roasted whole bean coffees. It was incorporated in Seattle Washington in 1985. Starbucks has continued to advance in the coffee industry over the years; but is classified as an eating place. In 2014 the corporation reported its annual revenue as 16,447,800 (Starbucks Corp, 2014). Starbucks financial health is evaluated using the tools of liquidity, solvency, and profitability. Liquidity refers to the company’s ability to pay short term obligations. There are two ratios that are most commonly used to evaluate this is the current and quick ratios. Starbucks 2014 current ratio is 1.37 and the quick ratio is .81. Next analysis examined for the company is solvency; this refers to the corporation’s capacity to meet its long-term financial commitments. The ratios typically used to evaluate solvency are debt to equity and debt to assets. Starbucks 2014 debt to equity ratio is .39 and the debt to assets ratio is .19. Finally, the profitability ratio was evaluated for Starbucks. Profitability is the assessment of the business’s ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific time period. There are five ratios evaluated for Starbucks in 2014; profit margin, gross margin...
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...Future Financial Health Analysis: Starbucks S. Albright Grand Canyon University: FIN 504 March 5, 2016 Starbucks started back in 1971 in Seattle, Washington. Initially, Jerry Baldwin, Zev Siegl and Gordon Bowker sold only coffee beans and coffee making equipment (coffee .org). It wasn’t until the company was sold to its Director of Retail Operations, Howard Schultz, that Starbucks started selling coffee drinks and soon after, Schultz spread the chain of stores throughout the U.S. taking over many small coffee shops in the process (coffee .org) In the 1990’s Starbucks offered stock options to its employees and went public with an IPO which opened the door for higher earnings and more profitability (coffee.org). This analysis will discuss how a single coffee house in 1971 has grown to more than 22,000 stores in 66 countries in 2016. Starbucks’ goals, market strategies, revenue and financial outlook will be discussed. Strategies and Operating Characteristics According to the Global Responsibility Report (2015), Starbucks vision for the future and what will have the greatest potential for impact include working with farmers for ethically sourced coffee beans, pioneering sustainability economically, socially, and environmentally, and creating career opportunities for young people (2015). Starbucks Newsroom reported on March 18, 2015 that their seven strategies would grow market capital to $100 billion (2015). Revenues are currently at $16.4 billion and the U.S. comp growth...
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...A Financial Ratio Quarterly Trend Analysis of Starbucks Corporation Stock Symbol: SBUX Listed on the NASDAQ Exchange Prepared for: In partial fulfillment of the requirements of the course: Section A: Computations The following table summarizes the ratio computations for SBUX. SBUX’s closest competitor, Caribou Coffee Company, Inc (CBOU) used as the industry benchmark. Section B: Financial Trend Comparison Starbucks’ liquidity ratios suggest that they can make their payments as they fall due. The current, quick and net working capital ratios all remained fairly constant throughout the four quarters. The current liabilities to inventory ratio saw a steady decline from the beginning of the year to the end, suggesting that the least liquid current asset, inventory has been more heavily relied upon to cover short term debts as the year progressed. This is also reflected in the cash ratio as it has declined, meaning cash, the most liquid is covering less of the current debt. The operating ratio saw a spike in Q3 followed by a trough the following month, most likely an accounting function as the annual number overall increased from the beginning of the year. The asset management ratios calculated remained constant over the year and suggest that assets are being utilized fairly for the level of sales generated. The inventory turnover saw little variation quarter to quarter with a slight dip in Q3 followed...
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...Assessment of Financial Performance of Starbucks during Fiscal Years 2005 – 2009 Assessment of the financial performance of an organization is very important for both the internal as well as external stakeholders. The management of an organization analyzes its financial performance in order to understand present financial of the company. Additionally, the information obtained from the analysis is used for planning and controlling various business activities of the organization. In order to make right decisions for achieving the organizational goals, the analysis of the financial performance is essential. The external users creditors, debtors, investors, analysts and auditor also analyze the financial performance of an organization in order to understand the trend of the past performance as well as present financial position of the company. On the basis of the profitability and solvency of the company, the stakeholders will determine their position regarding relationship with the company. In this paper, the financial position of Starbucks is analyzed for five financial years between 2005 and 2009. Financial statements of Starbucks are used for analyzing the financial position of the organization for the years 2005, 2006, 2007, 2008, 2008 and 2009. Different ratios will be calculated to explain different aspects of the financial performance such as profitability, investment, liquidity etc. In this paper significant ratios of Starbucks are calculated for consecutive...
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...Financial Analysis Project-Final Paper Ladrica McRae MBA 503 February 28, 2016 Purpose of Analysis All managers and investors needs to know and understand how well they are performing in their industry against competitors and to make sure they are meeting goals that they set for themselves as a company. This will also help them understand their risk and profitability as a company. The food industry is very diverse in the United States and Internationally. Company Background and History Starbucks corporation, an American company founded in 1971 in Seattle, WA is a premier roaster marketer and retailer of specialty coffee around the world. Starbucks has about 182,000 employees across 19,767 company operated and licensed stores in 62 countries. Their product mix includes roasted and handcraft high quality premium priced coffees, teas, a variety of fresh food items and other beverages. They also sell a variety of natural food service accounts. Starbucks had a total revenue of $14.89 billion as of September 29th 2013. (Greedy) Starbucks receivables are mainly comprised of receivables for products and equipment sales and royalties from their licenses, as well as from receivables from CPG and foodservice business customers. Their allowances for doubtful accounts is calculated based on historical expense, customer credit risk and applications of specific identification method. As of September 28th 2014 and September 29th 2013, the allowance for doubtful account was $6.7...
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...Contents 1 Introduction 2 2 Starbucks Vision, Mission and Objectives 3 2.1 Vision statement 3 2.2 Mission Statement 3 2.3 Environmental Mission Statement 3 2.4 Objectives of Starbucks 3 3 Financial Analysis 3 3.1 Profitability and Revenue 3 3.2 Efficiency and Debt ratio 4 3.3 Product Mix Revenue 4 3.4 Global stores growth 4 3.5 Starbucks SWOT Analysis 5 3.5.1 Strengths 5 3.5.2 Weaknesses 5 3.5.3 Opportunities 5 3.5.4 Threats 6 3.6 Ansoff’s matrix analysis for Starbucks 6 4 Specialty Coffee Market Competition 7 4.1 Overview of Starbucks competitors 7 4.2 Financial analysis between Starbucks and Dunkin Donuts 7 4.3 Starbucks versus Dunkin Donuts strategies 8 5 Analysis of specialty coffee market 9 5.1 Industry overview 9 6 Future Market Challenges 10 6.1 Factors in favor of the industry 10 6.2 Challenges derived using Porter’s Five Forces 10 6.2.1. The Threat of Substitution 10 6.2.2. The Threat of New Entry 10 6.2.3. Competitive Rivalry 10 6.2.4. The Bargaining Power of Suppliers 10 6.2.5. The Bargaining Power of Buyers 11 6.3 Recommendation 11 6.4 Conclusion 11 Bibliographic 11 Appendix 11 Company Name : Starbucks Corporation (NASDAQ: SBUX) Headquarters : Seattle, Washington, U.S. Number of Employees : More than 200,000 employees Revenue (FY2013) : USD14.9 billion Total number of store : 19,767 stores in 62 countries worldwide Market Capital (FY2013) : USD41.44 billion Chief Executive Officer : Howard Schultz ...
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...Starbucks Financial Analysis Table of Contents History 3 Overview 3 Strategy 3 S.W.O.T. 4 Starbucks Ratios 5 Balance Sheet Analysis 5 Profitability Ratios 8 Activity Ratios 9 Investment Returns 9 Comparative Analysis 10 Profitability 10 Management Effectiveness 10 Valuation Measures 10 Share statistics 10 Stock Price History 11 Dividends & Splits 11 Balance Sheet Ratios 11 Conclusion 11 References 12 Electronic Sources 12 Bibliographic Sources 12 Appendix 13 History The first Starbucks affiliate opened in 1971 in Seattle. The company focused on selling roasted gourmet coffee beans and coffee accessories. The name originates from a character in the novel Moby Dick from Herman Melville. In 1982 Howard Schultz joined the foundation-team of Jerry Baldwin, Zev Siegel and Gordon Bowker as the Director of Retail Operations and Marketing. Inspired by his personal experiences of Italy´s coffee tradition, Schultz proposed to change the company´s strategy and create a coffee chain where customers enjoy their coffee and meet friends. His idea was to transform the coffee shop to be a central meeting and socializing point. As Schultz was not able to convince the founders to switch the company into a concept coffee shop he started his own coffee shop, Il Giornale. Due to his success with his own coffee shop and the support of local investors, he was able to acquire Starbucks in 1987 from its founders. Schultz overtook the name and started a progressive...
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...and Compliance Paper Introduction Starbucks boasts that they serve the best coffee possible to meet their mission to inspire and nurture the human spirit, one person, one cup, and one neighborhood at a time. Starbucks has grown from one store in Seattle founded by two teachers and a writer in 1971 to more than 17,000 stores throughout the United States and overseas companies. Of these, 53% are directly owned by Starbucks and the rest in franchised contractor leases. This amazing feat brought three people together, each using $1,350, and borrowing $5,000 to make over a billion dollar per year successful business 40 years later. The name Starbucks was their original name in reference to the coffee-loving first mate in Moby Dick, and the design was from the two-tailed siren mermaid. Most recognize the Starbucks brand as a house-hold name and should also know that they are proud and committed to their coffee knowledge, customer service, and product expertise. They call their employees partners and offer Starbucks internal programs such as comprehensive health coverage and equity in the company. Every Starbuck’s employee knows he or she is a visual symbol of the company and needs to work as if each store was hid or her own. Starbucks also adheres to the requirements of the Security Exchange Commission (SEC), which is a publicly traded company known as SBUX. The aim of this paper is to discuss the roles of ethics and compliance of Starbucks, the procedures put in place to ensure...
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...Courtney Parker c.energizerbunny@gmail.com Courtney Parker c.energizerbunny@gmail.com Abstract Case Analysis and Three year Plan for Starbucks Abstract Case Analysis and Three year Plan for Starbucks Module 7 Final project Case Analysis - Starbucks Module 7 Final project Case Analysis - Starbucks Courtney Parker Strategy Final Project Case Analysis – Starbucks For my case study I have chosen the corporation of Starbucks. The intention of this paper is to introduce the mission and vision statement of Starbucks along with a presentation and review of their code of ethics. These statements and the code of ethics will be compared to and evaluated with the second chapter recommendations and concepts within Strategic Management: Concepts and Cases by Fred R. David. Starbucks does not have a vision statement but rather a mission statement in conjunction with a value statement of sorts. Interestingly, Starbucks mission statement is fairly far removed from coffee, their main source of profit and business venture. It states: “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks.com, 2013). While the statement is inspiring, as a mission statement it fails when held to the standards put forth by Fred David. Although the mission statement for Starbucks addresses some of these, it only lightly highlights some and completely misses others. According to Strategic Management Concepts and Cases, a mission statement must...
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...Financial Statement Analysis Paper Starbucks Coffee Company SUMMARY/INTRODUCTION Starbucks identifies itself as “the premier roaster, marketer and retailer of specialty coffee in the world” and fits squarely in the Coffee Shop industry. According to the IBISWorld Industry Report 72221b (Coffee & Snack Shops in the US), the “industry is composed of establishments that prepare or serve specialty snacks and nonalcoholic beverages including ice cream, frozen yogurt, cookies, donuts, bagels, coffee, juices, smoothies and sodas.” This fits the profile of Starbucks perfectly. Porter’s Five Forces: Supplier Power: Starbucks, for instance, identifies as being susceptible to supply of their coffee beans, such as weather, natural disasters, crop disease, general increase in farm inputs and costs of production, inventory levels, and political and economic conditions; all of these have a significant impact on crop pricing. Reliance on a singular bulk commodity, namely coffee beans, leads to high exposure should there be any roadblocks in supply come up. Many of these factors are out of companies’ control, such as material interruption in service providers and distribution channels, increased trade taxation, shipping embargoes or customs restrictions, or any natural disasters which may threaten the supply chain. (Information sourced from Starbucks Fiscal Report, 2014) Threat of Substitutes (High): Aside from heavy competition from storefront competitors, coffee snack shops...
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...The Performance Analysis between Dunkin Donuts and Starbucks FIN-515-66639 Managerial Finance Syed Tariq Ali Anvery Professor Michael Vasilou March 19, 2015 Dunkin' Brands Group, Inc DuPont 2014 Starbucks Corporation DuPont 2014 1. Return on equity= Net income/Equity 1. Return on equity= Net income/Equity 177,468/ 367,959 2,336,400/5,272,000 48% 44.32% 2. Profit margin= Net income/Sales 2. Profit margin= Net income/Sales 177,468 / 748,709 2,336,400/1,644,7800 23.70% 14.20% 3. Asset turnover= Sales/Assets 3. Asset turnover= Sales/Assets 748,709/317,7383 1,6,447,800/1,075,2900 23.56%. 15.23% 4. Financial leverage= Assets/Equity 4. Financial leverage= Assets/Equity 3,1,77,383/367,959 1,075,2900/5,272,000 8.63% 2.04% ROE=23.70*23.56*8.63= 48.75% ROE=14.20*15.23*2.04=44.18% RATIOS Dunkin' Brands Group, Inc DuPont 2014 Starbucks Corporation DuPont 2014 Profitability Ratios Gross Margin Gross profit/ Sales Gross profit/ Sales 613,418/748,709 9,589,000/16,447,800 81.93% 58.39% Gross Margin: Gross margin shows the profitability of the actual products being sold before certain expenses and overhead are taken out. It measures how much higher they are able to price products above the costs to produce those products. Therefore, gross margin shows how much of every sales dollar can then be used in the business...
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...FINANCIAL STATEMENT ANALYSIS PROJECT BAT4M1 Grayden M. Garside. Starbucks is the largest coffeehouse company in the world and originates from Seattle, Washington. The first Starbucks was opened in Seattle on March 30, 1971. The three founders met while they were students at the University of San Francisco: English teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker. The founders were inspired by Alfred Peet, coffee roasting entrepreneur, to sell his high-quality coffee beans and equipment. Since the first Starbucks opening in 1971, 18,065 stores have followed. Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 60 countries. Starbucks is also a very profitable company; it has steadily made money each year since 2008 and has been increasing the amount of money made each year substantially. Last year, 2012, Starbucks had almost two billion dollars in profit, which is almost four times as much as what they made it 2008. This increase in income was caused by the massive growth of the company and all the new coffeehouses being opened in emerging markets such as China and Japan. On top of record high profits Starbucks also had record high profit margins, being 15%, so every one dollar in revenue they received they made fifteen cents off that dollar. Starbucks came out with a lot of new innovations such as Starbucks’ own coffee brewer for the home, the Verissimo. Also new varieties of drinks...
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