Starbucks Case Study
Diana Leon
05/06/2015 Starbucks Case Study
a. Starbucks Corporation makes money in a few different ways, it’s highest revenue source are through the company-operated stores, here they sell things like different coffee brews, teas and pastries. Starbucks’ other revenue sources include product sales to licensed stores, this includes royalties and other fees paid to Starbucks for using it’s brand. Another source of revenue is consumer packed goods (CPG), food service and other, threw CPG, food service and other, Starbucks sells already packaged goods like coffee and tea to other retail stores like grocery stores, gas stations, warehouses, etc. Starbucks also holds short and long-term investments, which primarily consist of investment grade debt securities as well as certificates of deposits all of which are classified as available-for-sale. The last way Starbucks makes money through by investments is in it’s trading securities portfolio, this portfolio is comprised of marketable equity mutual funds and equity exchange-traded funds. Starbucks is also a public corporation so it also raises capital by issuing stock.
b. The most commonly prepared financial statements for external reporting are the income statement, balance sheet, statement of cash flows and statement of owners equity. Starbucks names these statements consolidated statements of earnings, consolidated balance sheet, consolidated statement of cash flows and consolidated statements of equity. Consolidated under this context means the merger of all the smaller companies Starbucks owns, Seattle’s Best Coffee for instance is subsidiary to Starbucks, the parent company.
c. Publicly traded companies typically prepare financial statements for external reporting purposes at least four times a year. The reason public companies prepare quarterly statements is to keep current and potential investors as well as lenders and other interested parties updated with the companies’ financial status. The SEC also
05/06/2015 Starbucks Case Study
a. Starbucks Corporation makes money in a few different ways, it’s highest revenue source are through the company-operated stores, here they sell things like different coffee brews, teas and pastries. Starbucks’ other revenue sources include product sales to licensed stores, this includes royalties and other fees paid to Starbucks for using it’s brand. Another source of revenue is consumer packed goods (CPG), food service and other, threw CPG, food service and other, Starbucks sells already packaged goods like coffee and tea to other retail stores like grocery stores, gas stations, warehouses, etc. Starbucks also holds short and long-term investments, which primarily consist of investment grade debt securities as well as certificates of deposits all of which are classified as available-for-sale. The last way Starbucks makes money through by investments is in it’s trading securities portfolio, this portfolio is comprised of marketable equity mutual funds and equity exchange-traded funds. Starbucks is also a public corporation so it also raises capital by issuing stock.
b. The most commonly prepared financial statements for external reporting are the income statement, balance sheet, statement of cash flows and statement of owners equity. Starbucks names these statements consolidated statements of earnings, consolidated balance sheet, consolidated statement of cash flows and consolidated statements of equity. Consolidated under this context means the merger of all the smaller companies Starbucks owns, Seattle’s Best Coffee for instance is subsidiary to Starbucks, the parent company.
c. Publicly traded companies typically prepare financial statements for external reporting purposes at least four times a year. The reason public companies prepare quarterly statements is to keep current and potential investors as well as lenders and other interested parties updated with the companies’ financial status. The SEC also