Starbucks Starbucks Financial Analysis - 1185 Words

Starbucks Financial Analysis It’s hard to drive the street these days and not see a Starbuck’s coffee house sitting on a corner with cars lined up in the drive-thru or consumers gathering in their cafà © to socialize. This has been the scene since the first Starbucks was opened in 1971. Since then, Howard Schultz, chairman and CEO, has embarked on a quest to bring Italian bistro traditions to the United States. Starbucks mission statement is simple, â€Å"to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time† (Starbucks, 2017, para. 7). Starbucks has built a global empire with a reported 22,519 stores spanning over 66 countries. The company’s diversity and purchase power of high quality whole coffee†¦show more content†¦Accounts Receivables Starbucks horizontal analysis on their consolidated balance sheet for the Fiscal years 2015 and 2016 shows that their accounts receivable increased by 6.93% which falls in line with their increase of 11.24% for their net revenue for 2015. Starbucks increased the amount of allowed purchases on credit and now have an increased receivables. Starbucks vertical analysis on their consolidated balance sheet shows that in 2016 accounts receivable’s was 5.37% of the company’s total assets in 2015 it was 5.79% of the company’s total assets. One should note that with the decrease in accounts receivable for 2016 could be that Starbucks utilized higher available cash and reinvested it in inventory and prepaid expenses. Long Term Debt Horizontal Analysis taken from the consolidated balance sheet also shows an increase of 36.41% from 2015 to 2016. This would fall in line with their increase in total liabilities as they had an increase of 28% from 2015 to 2016. Vertical Analysis taken from the consolidated balance sheet shows that in 2016, long term debt was 22.35% of total liabilities and in 2015, long term debt was only 18.91% of total liabilities. It should be noted that the increase in long term debt of 19% were assets that were financed as long term debt. Ratio Analysis In essential ingredient in understanding financial statements using ratio analysis to identify to measure the overall health of a business. 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