Financial Analysis of Starbucks Corporation

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Recommended: Starbucks on the international market

Starbucks Corporation was formed in 1985. Starbucks Corporation start with purchase and roast the high-quality bean and sell them. Now Starbuck not only provide coffee but also tea and other beverages. The company brand product will be under name of Starbucks, Tazo, Teavana, Starbucks VIA, Starbucks Refreshers, Seattle’s Best Coffee, La Boulange, and Verismo brand . Starbucks Corporation sector now is in restaurant or specialty eateries. On 2013, Starbucks store reach into approximately 10,194 stores and approximately 9,573 licensed stores. Starbucks open in over than 50 countries. Starbucks headquarter is at 2401 Utah Avenue South, Seattle, WA, 98134. Overall Starbucks employees are 182.000.

One of the biggest operating risks of Starbucks is commodity price volatility. The price is related to dairy, sugar and coffee bean price especially when Starbucks need to maintain the supply or inventories to support the operation. Even Starbucks have a contract with all that commodity and also agreement about the price, the contract is only for 5 years, its mean after 5 years the product can be have higher prices. Below is the diagram for coffee price related to Starbucks share price.

Another operating risk of Starbucks is:

• Opening 3,000+ net new stores in Americas region by 2017

• Channel Development (CPG) to double its international footprint by 2015

• China on track to become second-largest market in 2014

• Starbucks VIA® Ready Brew, K-Cup® packs and now the Verismo System combine to create the strongest and most complete line-up of premium single-serve options in the global coffee industry

• Social and digital media, loyalty and mobile payment platforms transforming customer experience and deepening connection to c...

... middle of paper ...

...nvestor look on Stock history from 1 year, Starbucks stock goes up from 63.21 to 70.17 (even Starbuck stock is going down now). Starbucks net income also goes up from last year. Based on 1 year calculation, Starbucks is a company that attract investor to put investment.

References

Matthew. (2014). Must know risk: why Starbucks should hedge its shrubs. Retrieved on May 15, 2014 from http://finance.yahoo.com/news/must-know-risks-why-starbucks-210008292.html

Starbucks Corporation (n.d.). retrieved on May 15, 2014 from http://investor.starbucks.com/

http://www.stockresearching.com/2013/09/11/starbucks-fundamental-analysis-wacc-cost-of-debt-and-cost-of-equity-sbux/

http://quicktake.morningstar.com/StockNet/bonds.aspx?Symbol=SBUX&Country=usa

http://www.bloomberg.com/quote/SBUX:US

http://www.marketwatch.com/investing/stock/sbux/financials/balance-sheet

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