SBUX ratio analysis YE2013
Starbucks is one of the world’s largest coffee retailers. We can see in the Notes to Financial Statements for the fiscal year ended September 30, 2012 of Starbucks Corporation (SBUX) that its nature of business is to sell its high-quality roasted coffee and tea beverages, coffee and tea products, and a variety of food items (United States).
SBUX has the closing stock price and number of common stocks outstanding on the year-end fiscal date as shown in TABLE 1. For the fiscal year 2012, the market capitalization of SBUX is about 37.77 billion US dollars.
TABLE 1 Y2010 Y2011 Y2012
Closing Price per share ($) 25.94 37.29 50.71
Number of shares outstanding on the year-end fiscal date (millions) 742.90 742.60 744.80
Market Capitalization (million $) 19,270.83 27,691.55 37,768.81
From financial ratio analysis of fiscal year 2012, based on the company’s performance, its profitability is almost the same as it was last year. Its operating margin is slightly increased while its net profit margin is decreased a little from fiscal year 2011. Its net revenues are in the growth stage, which causes the cost of sales to rise as well. The cost of sales is also increased because of the increase in leasehold improvements, which affects the depreciation expense related to production and distribution facilities included in cost of sales to increase (United States). Its net revenues also cause income taxes to increase. In 2012, the income tax is higher than in the fiscal year 2011 because the firm has a tax benefit related to the acquisition of the ownership interest in Switzerland and Austria (United States). SBUX’s liquidity is increasing over time. Current ratio has increased from 1.8282 times in 2011 to 1.9004 times in 2012. Its financial leverage, from total debt to total assets ratio, is declining because of the increase in retained earnings. This means that the company grows internally. Its decreasing total debt to total assets ratio is consistent with its
SBUX has the closing stock price and number of common stocks outstanding on the year-end fiscal date as shown in TABLE 1. For the fiscal year 2012, the market capitalization of SBUX is about 37.77 billion US dollars.
TABLE 1 Y2010 Y2011 Y2012
Closing Price per share ($) 25.94 37.29 50.71
Number of shares outstanding on the year-end fiscal date (millions) 742.90 742.60 744.80
Market Capitalization (million $) 19,270.83 27,691.55 37,768.81
From financial ratio analysis of fiscal year 2012, based on the company’s performance, its profitability is almost the same as it was last year. Its operating margin is slightly increased while its net profit margin is decreased a little from fiscal year 2011. Its net revenues are in the growth stage, which causes the cost of sales to rise as well. The cost of sales is also increased because of the increase in leasehold improvements, which affects the depreciation expense related to production and distribution facilities included in cost of sales to increase (United States). Its net revenues also cause income taxes to increase. In 2012, the income tax is higher than in the fiscal year 2011 because the firm has a tax benefit related to the acquisition of the ownership interest in Switzerland and Austria (United States). SBUX’s liquidity is increasing over time. Current ratio has increased from 1.8282 times in 2011 to 1.9004 times in 2012. Its financial leverage, from total debt to total assets ratio, is declining because of the increase in retained earnings. This means that the company grows internally. Its decreasing total debt to total assets ratio is consistent with its
Cited: Hoover’s. Starbucks Corporation Competition. Hoover’s, n.d. Web. 13 Sep. 2013. United States. Securities and Exchange Commission. “Starbucks Corporation Form 10-K.” U.S. Securities and Exchange Commission. Nov. 2012. Web. 13 Sep. 2013. Yahoo!. Starbucks Corporation Competitors. Yahoo! Finance, n.d. Web. 13 Sep. 2013.