Financial Management

Financial Management

Financial Management of Starbucks

Introduction

Starbucks is a multinational chain of coffee/restaurants, more commonly known as coffee shops, which is headquartered in Seattle, Washington. This chain of coffee shops is particularly famous among students and urban assets. Starbucks is named after the character in Moby Dick. Starbucks offers drinks and pastries of all kinds, and prices are relatively high compared to its competitors. The chain has more than 18,000 stores around the world (all are not in the company), the vast majority of coffee shops are located in the United States.

Financial Management

In business, profit refers to profit or gain that was obtained from a challenge or money. Profitability is also seen as the remuneration received for the money. In the world of finance is also known as dividends received from an investment in a business or company. The payoff can be represented as relative (percentage) or absolute (in values). The profitability of any investment should be sufficient to maintain the value of the investment and to increase it (Vandyck, 2006). Depending on the investor's goal, the return on investment can be left to maintain or increase investment, or can be removed to invest in another field. To determine the profitability is necessary to know the amount invested and the time during which he has made or maintained investments. The basic three methods that are followed to calculate profitability are discussed below with respect to Starbucks' performance.

Return On Investment

The rate of return on investment (ROI for short) is a financial indicator that measures the profitability of an investment, ie the rate of change experienced by the amount of an investment (or capital) to become useful (or benefits).

The index formula for ROI is:

ROI = ((Utilities - Investment) / Investment) x 100

The Return on Investment (ROI) of Starbucks for the last five years is:

2010

2009

2008

2007

2006

ROI %

31.99

12.01

10.72

29.29

30.26

The ROI for year 2010 is 31.99 %, which means the investment has a profitability of 31.99 % with respect to the initial investment. ROI (return on investment) is almost the most famous financial instruments it represents the ratio of money gained (profits or losses) and the money invested (money or capital assets). Return on investment is not a specific length of time but is often used to measure the return during the fiscal year and is called in this case, the annual return on investment. The ROI is use to evaluate a going concern, that is, if the ROI ...