FINANCIAL ANALYSIS

Financial Analysis of Starbucks Corporation

Financial Analysis of Starbucks Corporation

Answer #1

Starbucks is a global coffee retail chain that specializes in coffee and other related beverages. The company purchases, roasts and sells high-quality whole bean coffees along with handcrafted coffee and tea beverages and a variety of fresh food items, through its retail stores 17,000 in numbers present in over 55 countries. It also sells various types of coffee and tea products and licensed their trademark through different channels such as licensed stores, grocery and national foodservice accounts.

Starbucks' company-operated retail stores are located in high-traffic, high-visibility locations, such as retail centers of suburbs and downtown , buildings of offices, universities, and in select rural and off-highway locations. The company also operates drive-thru retail stores for ensuring access and a facility for pedestrian customers..

Their major competitors are,

Caribou Coffee Company, Inc., Dunkin' Brands, Inc., Green Mountain Coffee Roasters, Inc., McDonald's Corporation, Nestlé SA, Peet's Coffee & Tea, Inc., and The J.M. Smucker Company.

They possess certain brands,

Starbucks Coffee, Tazo Tea, Seattle's Best Coffee, Torrefazione Italia Coffee, Starbucks VIA Ready Brew, Frappuccino, Evolution Fresh.

Answer #2

The capital structure position of Starbucks varies year to year. For instance, in 2010 it was around 42:58 which indicates that they use 42% debt for financing their assets. In 2011, the proportion has decreased up to 40:60 which indicates that company has paid off their debt in order to increase their profitability. The financial leverage shows highlight the riskiness. Over here, Starbucks has maintained significant ratio of 40:60 which shows their strong position as they are not relying more over debt and ultimately they have to pay less interest expense.

Answer # 3

Starbucks is facing three major kinds of risks such as, Saturated Market condition and reduce employee disruption in order to increase the quality of service and coffee for ...