Starbucks Financial Analysis

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Financial Analysis - Starbucks Corporation
Travis Demmons
Dr. Said
FIN 534 – Financial Management
March 16, 2013

In this assignment, a savvy financial analyst researching companies in which to invest a U.S. publically-traded company that would be a good investment was chosen. After a lengthy search, a company that my family is unduly familiar with, Starbucks, was chosen and in the following pages a financial analysis will be described. The world renowned Starbucks Corporation (New York Stock Exchange: SBUX) has gone from a Seattle-based company to one of the world's most powerful and recognizable brands of high-quality coffee. Starbucks welcomes millions of customers through their doors every day in destinations all over the globe. Starbucks mission is to inspire and nurture the human spirit; “one person, one cup and one neighborhood at a time”. They have long believed in serving the best coffee possible with their ultimate goal for all of their coffee to be grown under the highest standards of quality but with maintaining the highest ethical practices possible. Starbuck’s company coffee selector’s travel to remote coffee farms all over the globe in search of the highest quality Arabica beans. Once the beans arrive at the Starbucks roasting plants, their experts attempt to balance the rich flavor of the beans through their signature Starbucks Roast (Starbucks.com, n.d.). Starbucks stores serve many patrons and purposes: a meeting place, taking a break with your favorite book, surfing the internet on their wireless connection, or simply finding a sense of home in a new city. Starbucks products consist of Coffee of more than 40 blends as well as single‐origin premium Arabica coffees. They offer freshly‐brewed coffee, hot and iced espresso beverages, coffee and non‐coffee blended beverages, smoothies and teas. Their lattes are a favorite of the authors and are one of their best-selling items. They also sell an assortment of coffee and tea equipment, mugs and accessories, music, books, and packaged coffee grounds or beans for the consumer on the go. Additionally, Starbucks sells baked pastries, sandwiches, salads, oatmeal, yogurt parfaits and fruit cups for the consumer with a desire for some food with their beverage of choosing. Starbucks is committed to doing business responsibly and earning the trust and respect of customers and partners; they accomplish this feat by acting ethically and by training their baristas appropriately. Starbucks ethical behavior is not limited to their employees, but also to their selection of sources. Ethical sourcing involves developing strong, long‐term relationships with farmers all over the world who also abide by the same ethical principles that Starbucks holds their own employees to and that which the customers expect from Starbucks. Starbucks has a goal by 2015, that all of their coffee will be grown using ethical trading and responsible growing practices. Starbucks considers themselves as environmental stewards and they show their commitment to the environment vigorously. Furthermore, they believe in the importance of caring for our planet and encourage others to do the same. Case in point is that by 2015, Starbucks has a goal in which 100% of their cups will be reusable or recyclable. As environmental stewards, Starbucks is working to significantly reduce the environmental footprint that they are creating by increasing their energy and water conservation program, recycling and only performing “green” construction. As strong as Starbucks commitment is to being environmental stewards, so too is their commitment to community involvement. Whether that is in the neighborhoods of the individual stores or the neighborhoods where the coffee beans are actually grown, Starbucks firmly believes in being a proactive member of the communities they are a part of. In support of Starbucks commitment to the communities, by 2015,...
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