Acc 561 Starbucks Corporate Analysis

Starbucks Corporate Analysis
Team C
ACC/ 561
June 7, 2014
Mr. Smith
Starbucks Corporate Analysis
Starbucks is one of America 's true success stories and a wonder of today 's corporate world. A brand known throughout the world, Starbucks is a beacon for coffee lovers everywhere. The coffee house phenomenon that started as a dream to come up with the best coffees, best customer service and best coffee experience any coffee lover would appreciate. Starbucks started as a coffee roasting company with a single store in Seattle Washington, and has come to be one of the most successful companies in the world serving millions. Since its inception in 1971, Starbucks has been a model for what many aspire to but often come up short. The
The short term ability is measured, of a company to pay the maturing obligations, and meet unexpected need for cash (Kieso, Kimmel, &Weygandt, 2011). Current assets divided by current liabilities is the current ratio formula. Between working capital and current assets, current assets is the more dependable formula (Kieso, Kimmel, &Weygandt, 2011). Two companies may have very similar working capital and yet have drastically different current ratios. For every dollar of the current ratio, depicts how much current assets, per that dollar the company has (Kieso, Kimmel, &Weygandt, 2011). The negative fact of the current ratio is that it doesn’t explain where the asset is. It can be a large portion in inventory which is not the same as having a complete asset. A dollar in inventory does not pay as quickly as a dollar in cash. Starbucks current assets are 11,516.7 (In millions), and the liabilities is 7,034.4 (Starbucks, 2013). The current ratio is 1.63, for every dollar the asset is 1.63 for the
This information illustrates how much capital the company has used in comparison to how much inventory it has sold. Company leaders use this information to make financial decisions. This concept is condensed by Jon Schreibfeder on Industrialsupplymagazine.com as “The inventory turnover rate measures the number of times you have turned your inventory during the past 12 months” (Schreibfeder, 2014). The formula for the turnover ratio is the cost of goods sold divided by the average inventory.
The Starbucks company leaders use this information as well. The Starbucks company inventory ratio for 2013 was 5.74. This indicates that Starbucks has sold and replaced its entire inventory 5.74 times last year. For a large company like Starbucks this is a good rate of turnover. The higher the number result, the better the inventory rate.
Receivables turnover is the accounting measure used to compute a firm 's effectiveness in lengthen credit as well as collecting debts. This ratio is calculated by the formula of net credit sales divided by average accounts receivables. For the Starbucks Company the receivables turnover ratio for 2013 was 26.5. Based on this information Starbucks accounts receivables were collected 26.5 times during the year.
Consolidated Balance