Starbucks Case Study 2013

t. The dollar amount for cash & cash equivalents increased between 2011 and 2012, yet the percentage of total assets comprising these assets declined. Explain.

: Common size percentage change is often interdependent. Even though the dollar amount for cash & cash equivalents increased in 2012 by 3.5% compared to 2011, the amount of total assets has been also increased by 11.7% compared to 2011 that is much more bigger percentage increase than the increase of cash & cash equivalents. So, the relative amount of cash & cash equivalents to total assets in 2011 (15.6%) was bigger than the relative percentage of those assets in 2012 (14.5%). From the chart, we can see that in 2011, the percentage of Long-term investments available-for-sale securities

Total operating expenses show to be the highest in 2009 at 102.2 and at the lowest at 86.6 in 2012. Along with the decrease in expenses, operating income shows to have increased significantly from 2009 to 2012. Starbucks restructured its business increasing sales growth while cutting operating and overhead costs. As shown on the financial statement, total operating expenses as a percentage of total net revenues has declined from 102.2% to 86.6% resulting in the increased percentage of net earnings from 3.2% to 10.4%. They have reduced store operating expenses by 5.5% (35% to 29.5%), depreciation and amortization expenses by 1.4% (5.5% to 4.1%), and restructuring charges by 3.4%(3.4% to 0%). The decrease of store operating expenses as a percentage of total net revenues was also due to increased Channel Development and licensed store revenues. Along with the decrease in store operating expenses, we can see that interest expense slightly decreases. This decrease in interest expense may be another reason behind the increase in net earnings. And also, income from equity investees was increased due to the increase in income from global partnership and joint venture