Stock Analysis of Net: Starbucks
Analysis of the Financial Statements
(a) How much did your company’s gross margin and gross margin as a percentage of revenue increase (decrease) over the past five fiscal years?
As per the report of Stock Analysis on Net on Starbucks’ profitability analysis, Starbucks’ gross profit margin was 55.75% in 2009, and it notably increased to 58.36% in the following year. However, the firm’s gross profit margin was decreased by 0.66% in 2011 reaching 57.70%. It was again dropped to 56.29% in 2012. According to the same report, in the last fiscal year, Starbucks achieved an improved gross profit margin of 57.14%. The recent increase in the company’s gross profit margin indicates that Starbucks is recovering from the shocks of the recent global recession. Similarly, the organization’s gross margin as a percentage of revenues markedly increased over the past five fiscal years. This trend in the gross margin reflects that the company is likely to improve its financial status over the coming years. Evidently the downsizing strategy widely employed by Starbucks management five years ago greatly assisted the company to improve its net earnings constantly.
(b) Compare your company’s working capital in the past five fiscal years
While analyzing Starbucks’ working capital or operating income, it seems that the organization has been constantly improving its status over the years. Starbucks’ operating income was only $562 in 2009 due to recessionary forces that affected the global economy. According to the Bloomberg Business Week report on Starbuck, the company’s operating income increased by $829.8 million by the following year, and reached $1391.8 million. In the following three years (2011, 2012, and 2013), Starbucks earned operating incomes of $1,524.6 million, $1,786.7 million, and $2,207.3 respectively. For the Starbucks stakeholders, it is hopeful to see that recently the company could increase its operating income from $1,786.7 million in 2012 to $2,207.3
(a) How much did your company’s gross margin and gross margin as a percentage of revenue increase (decrease) over the past five fiscal years?
As per the report of Stock Analysis on Net on Starbucks’ profitability analysis, Starbucks’ gross profit margin was 55.75% in 2009, and it notably increased to 58.36% in the following year. However, the firm’s gross profit margin was decreased by 0.66% in 2011 reaching 57.70%. It was again dropped to 56.29% in 2012. According to the same report, in the last fiscal year, Starbucks achieved an improved gross profit margin of 57.14%. The recent increase in the company’s gross profit margin indicates that Starbucks is recovering from the shocks of the recent global recession. Similarly, the organization’s gross margin as a percentage of revenues markedly increased over the past five fiscal years. This trend in the gross margin reflects that the company is likely to improve its financial status over the coming years. Evidently the downsizing strategy widely employed by Starbucks management five years ago greatly assisted the company to improve its net earnings constantly.
(b) Compare your company’s working capital in the past five fiscal years
While analyzing Starbucks’ working capital or operating income, it seems that the organization has been constantly improving its status over the years. Starbucks’ operating income was only $562 in 2009 due to recessionary forces that affected the global economy. According to the Bloomberg Business Week report on Starbuck, the company’s operating income increased by $829.8 million by the following year, and reached $1391.8 million. In the following three years (2011, 2012, and 2013), Starbucks earned operating incomes of $1,524.6 million, $1,786.7 million, and $2,207.3 respectively. For the Starbucks stakeholders, it is hopeful to see that recently the company could increase its operating income from $1,786.7 million in 2012 to $2,207.3
References: Bloomberg Business Week. Starbucks Corp (SBUX:NASDAQ GS). Retrieved from http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=SBUX Morning Star. Starbucks Corp. Retrieved from http://quicktake.morningstar.com/StockNet/bonds.aspx?symbol=SBUX Rudarakanchana, N. (2013, Sep 3). Starbucks Seeks More Debt Financing, In New Debt Issuance Worth $750 Million. International Business Times. Retrieved from http://www.ibtimes.com/starbucks-seeks-more-debt-financing-new-debt-issuance-worth-750-million-1402435 Starbucks Corporation Fiscal 2013 Annual Report. Retrieved from http://news.starbucks.com/uploads/documents/Starbucks_Fiscal_2013_Annual_Report_-_FINAL.PDF Starbucks. Investor Relations. Dividend History. Retrieved from http://investor.starbucks.com/phoenix.zhtml?c=99518&p=dividendhistory Stock Analysis on Net. Starbucks Corp. (SBUX). Retrieved from http://www.stock-analysis-on.net/NASDAQ/Company/Starbucks-Corp/Ratios/Profitability Y Charts. Starbucks Debt to Equity Ratio (Quarterly):0.4141 for March 31, 2014. Retrieved from http://ycharts.com/companies/SBUX/debt_equity_ratio