Starbucks Corporation Analysis
Starbucks Corporation Analysis
Bob Lewis, Karen Mann, Mike Reynolds, Maria Townsend
ACC/561
March 30, 2014
Instructor: Steven Parker
Starbucks Corporation Analysis
Team B conducted a comparative and ratio analysis on Starbucks Corporation to measure its profitability and liquidity. The analysis conducted used Starbucks balance sheets from 2011 and 2012, income statements to understand their financial results, and trends Starbucks had to over time. The analysis showed the companys performance over those two years to include its efficiency, liquidity, profitability, and solvency.
Horizontal Analysis Income Statement Chart
In Dollars
Net Sales
13,300,000,000
11,700,000,000
1,600,000,000
13.60%
Cost of Goods Sold
10,710,000,000
9,540,000,000
1,170,000,000
12.30%
Interest Expense
32,700,000
33,300,000
-600000
Income Taxes
674,400,000
563,100,000
111300000
19.80%
Total Cost, Expenses Interest and Taxes
11,417,100,000
10,136,400,000
1,280,700,000
12.6%
Net sales for Starbucks jumped in the positive direction. A 13.60 percent growth showed the company had a productive 2012. There was a -18 percent difference in the interest expense category. This is a positive sign because it reflected the company became stronger when servicing its debt. Cost of goods sold trended in a not so desirable direction. There was a 12.30 percent increase overall in the amount of COGS for Starbucks in this category, which highlighted the increased amount of money it took to produce its famous goods. Income taxes increased significantly due to the overall increase in revenue in the company; however, this was an expected outcome. Overall, there was a 12.6 percent increase in Total Cost, Expenses Interest and Taxes combined respectively.
Starbucks Corporation Ratio Analysis 2011/2012
Ratio analysis is a commonly used analytical tool for verifying the performance of a firm. Team B reviewed Starbucks 2011 and 2012 balance sheet and income statements from its financial statement to show the calculations of Current Ratio, Quick Ratio, and Return on Assets (ROA), Return on Equity (RAE), Total Debt Ratio, Debt Equity Ratio, Assets Turnover,