Financial Ratios, Growth Analysis, Cost of Capital, Capital Structure, & Capital Budgeting Analysis for Starbucks Corp.

Running head: Financial Analysis of Starbucks

University of Houston-Victoria

School of Business Administration

FIN6352 – Financial Management

Dr. Omar M. Al Nasser

August 11th, 2013

Financial Ratios, Growth Analysis, Cost of Capital,

Capital Structure, & Capital Budgeting Analysis For Starbucks Corp.

Table of Contents

Executive Summary……….………………………………………………………….………..3

Capital Structure Estimation……..……….………………………………………………… 4

WACC ………………………………………………………………………………. 4

Cost of Debt …………………………………………………………………………

Cost of Equity ……………………………………………………………………….. 5

Cash Flow Estimation ………………………………………………………………………...7

Capital Budgeting Analysis……………………………………………………………………9

Conclusion of Capital Budgeting…. ……………………….………………………………...10

References ……………………................................................................................................11

Executive Summary

This financial analysis centers on Starbucks Corp. (NMS: SBUX). Starbucks Corporation is the worldwide leader in coffee and has a strong commercial history of product development and branding. Starbucks (SBUX) Corporation according to Plunkett Research, Ltd. positions in their industry group as number one in sales and profits.

This analysis evaluates the ratio in their market value, profitability, asset management, debt management, liquidity ratios, and percent growth rates over a 7 year time.

The cash flow statement is another financial statement, which lists the cash flows of a business over a period of time, ususally the same period as is covered by the income statement. It helps the business to check its cash inflows and outflows and to see the whether the business has cash surplus or shortage. For internal users, cash flow statement helps managers to check whether appropriate cash is available to pay the day-to-day-expenses of the business.

These statements summarize the performance,...